SECP has proposed the establishment of a Registration and Trading Platform (RTP) for unlisted public companies, seeking to list these companies at PSX. This initiative aims to increase the visibility of Pakistan’s corporate sector by offering a regulated platform for trading in unlisted company shares. The consultation paper issued by SECP outlines the strategic benefits, phased implementation plan, and anticipated outcomes of this bold proposal.
The RTP is designed to open up new opportunities for unlisted public companies, providing them with a chance to grow their investor base and gain visibility in the domestic and international markets. The move to introduce a regulated platform comes at a crucial time when Pakistan is keen on boosting transparency, improving corporate governance, and attracting investment into its capital markets. By facilitating the registration and subsequent trading of shares, SECP intends to provide a pathway for unlisted companies to access more robust financial markets, thereby encouraging greater corporate accountability and stronger governance practices.
One of the core objectives behind the RTP is the dissemination of financial results for registered companies. This public disclosure will help companies demonstrate their financial health and operational transparency, fostering a more informed investor base. It is hoped that this shift toward greater openness will encourage listed and unlisted companies alike to adopt improved corporate governance practices and better documentations. The increased availability of financial information will not only enhance investor confidence but also help companies adopt a culture of public accountability, a crucial factor in fostering sustainable growth.
The SECP consultation paper suggests a phased approach for the implementation of the RTP, beginning with larger unlisted companies. Under the proposed plan, companies with a paid-up capital of Rs. 200 million or more will be required to register on the RTP in the first phase. In the second phase, companies with a paid-up capital ranging from Rs. 25 million to Rs. 200 million will also be eligible for registration on the platform. This phased approach ensures that companies are gradually introduced to the platform in a structured manner, allowing both businesses and investors to adapt to the changes.
The RTP aims to provide unlisted companies with access to a much wider range of investors. Given the local penetration and international visibility of PSX, companies registering on the RTP will be able to attract attention from both domestic and global investors. By leveraging the growing visibility of the platform, these companies can present themselves as viable investment opportunities, connecting with a diverse range of potential investors. The RTP will allow these companies to take advantage of the fully automated and digital capital market infrastructure, making the process of trading shares more efficient and accessible.
Moreover, RTP registration could serve as a stepping stone for companies to pursue formal listings on the PSX Mainboard or GEM (Growth Enterprise Market) board in the future. The platform will help companies familiarize themselves with the regulatory framework and operational procedures required for full PSX listings, enabling them to gradually scale their operations and reach more advanced capital market infrastructure.
Despite the exciting prospects, it is important to note that RTP registration does not mean a company is formally listed on PSX. RTP-registered companies will not be entitled to the same privileges that come with a formal listing, such as raising capital through the stock market. These companies will still need to go through the SECP and PSX approval process for any future listing or capital raising activities. However, registration on the RTP will give companies access to trading in their shares among existing shareholders and sophisticated investors, such as high-net-worth individuals, financial institutions, and corporations.
This proposal also reflects the government’s broader push to enhance the appeal of Pakistan’s capital markets and encourage greater foreign and domestic investment. By facilitating a more open and regulated trading platform for unlisted companies, the SECP hopes to attract more companies to the formal capital markets, increasing the breadth and depth of the market. This initiative is aligned with global trends where emerging markets have been keen to create more avenues for companies to connect with investors, improve financial transparency, and unlock new sources of capital.
Stakeholders are being encouraged to participate in the consultation process by submitting their feedback to SECP by February 06, 2025. The input from market infrastructure institutions, investors, and companies will play a key role in shaping the final version of the proposal, ensuring that the platform addresses the needs of all involved parties.
The SECP’s RTP proposal represents a transformative step towards modernizing Pakistan’s corporate sector. It provides a viable solution for unlisted public companies to increase their visibility, improve corporate governance, and gain access to a larger pool of investors. If successful, this initiative could provide a significant boost to Pakistan’s economy, making it more attractive to investors and positioning its corporate sector for long-term growth.
