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The Securities and Exchange Commission of Pakistan (SECP) has eased rules governing rights issues, allowing listed companies facing financial stress to raise capital from existing shareholders, provided key stakeholders obtain bank-issued No Objection Certificates (NOCs). The move is aimed at improving access to funding while preserving investor transparency.
In a notification issued on January 19, 2026, the SECP amended the Companies (Further Issue of Shares) Regulations, 2020, addressing long-standing hurdles that restricted listed companies from announcing rights issues due to adverse Credit Information Bureau (CIB) reports. Previously, even viable companies were barred from raising funds if sponsors, directors, or major shareholders had overdue loans or defaults reflected in their credit records.
Under the revised framework, this restriction has been relaxed. Companies can now proceed with rights issues if the concerned sponsors or directors secure NOCs from their financial institutions specifically for the proposed capital raise.
To safeguard investor interests, SECP has made enhanced disclosure mandatory for companies availing this relaxation. The rights offer document must clearly disclose any defaults, overdue amounts, ongoing recovery proceedings, and the status of debt restructuring. According to the regulator, “the revised regulations aim to balance corporate rehabilitation with informed investor decision-making.”
Rights issues are a key fundraising tool for listed companies, especially during periods of economic pressure and tight credit conditions. Pakistan’s capital market has seen increased demand for regulatory flexibility to support corporate restructuring without compromising transparency. The amendments follow extensive consultations with market participants, including listed firms, issue consultants, law firms, and capital market institutions.
The SECP believes the changes will boost market confidence, facilitate corporate revival, and strengthen disclosure standards in Pakistan’s equity market. By enabling shareholder-backed funding for stressed companies, the regulator aims to support business continuity and long-term market stability.
