Islamabad, The Securities and Exchange Commission of Pakistan (SECP) has recently issued a circular aimed at easing the process of reporting shareholding changes for companies. This move comes as a clarification to the provisions under section 465(4) read with 510 of the Companies Act 2017, specifically regarding the filing of return with the registrar for any change in the shareholding of companies.

According to Securities and Exchange Commission of Pakistan, the new circular, numbered 9/2024, mandates that any company, barring those listed, must report a change of more than 25% in its shareholding, membership, or voting rights using Form-3. However, in a significant development, the circular also allows companies to report changes of twenty-five percent or less, addressing previous challenges in shareholding transfer reporting and ensuring that the records of company shareholdings remain up-to-date.

This clarification is expected to facilitate a more straightforward reporting process for companies, encouraging them to keep the registrar informed about any changes in shareholding, regardless of the size. This change is not only beneficial for the companies but also for stakeholders and interested parties, as the information maintained by the Registrar is public. Consequently, updated shareholding information will be readily available for inspection, and certified copies can be obtained by anyone interested.

The SECP’s latest circular represents a step forward in making corporate governance more transparent and efficient, allowing for better stakeholder engagement and ensuring that company records accurately reflect current ownership and voting rights structures.