Muhammad Soban

The Securities and Exchange Commission of Pakistan in coordination with the Pakistan Stock Exchange (PSX) has introduced a digital initial public offering (e-IPO) system to bring greater convenience to international investors, WealthPK reports. The new system has been launched for investors, who participate in initial public offerings (IPOs), holders of Roshan Digital Account and corporations.

Under the system, the subscription process for securities has been automated to increase the outreach of an IPO. The e-IPO system enables individual investors, corporate investors and Roshan Digital Account holders to submit applications and pay subscription fees electronically. Brokers and banks are also allowed to submit applications for IPOs on behalf of their clients and pay subscription money.

The e-IPO has received 80 to 85 percent of applications. Through e-IPOs, 5,835 new investors have entered the capital market. As an alternative to the traditional and manual method of processing the IPO applications, the SECP, in coordination with the PSX, has developed the online system titled PRIDE, which enables issuers and companies to apply for IPOs, interact with the PSX, and receive updates about their applications.

As an apex regulator of the capital market, the SECP has adopted a disclosure-based system for processing IPO applications, according to a document. The SECP reviewed 10 IPO applications in the fiscal year 2021 and recommended certain disclosures to add value to the prospectus. The document said that listings increased as a result of regulatory amendments. It said that 10 companies tapped the IPO market in the year 2021 as compared to one firm in 2020.

The new system will help overseas Pakistanis to participate and invest directly in IPOs. The deposits by overseas Pakistanis through Roshan Digital Account have exceeded $5 billion. Out of total deposits, one percent is invested in the stock market. The State Bank of Pakistan (SBP) has also instructed commercial banks to launch their mobile applications for Roshan Digital Account holders. The application will provide an opportunity to the users to perform multiple transactions. The SBP is also increasing the menu of services under the umbrella of Roshan Digital Account to bring greater convenience to overseas Pakistanis, according to the document available with WealthPK.

Credit: Independent News Pakistan-WealthPk