The Securities and Exchange Commission of Pakistan (SECP) has approved the Joint Procedures for the launch of a new Book Building Mechanism, completing recent amendments to the Public Offering Regulations, 2017. This approval establishes the operational framework and procedures for book building in initial public offerings (IPOs).
The new system aims to promote fairer price discovery, improve transparency, and strengthen investor confidence, aligning with the SECP’s broader agenda to deepen market participation and enhance efficiency in Pakistan’s capital markets.
Under the new mechanism, the Pakistan Stock Exchange (PSX) and the National Clearing Company of Pakistan Limited (NCCPL) have developed an enhanced system that replaces the traditional Book Runner model with the concept of Eligible Participants (EPs). EPs include securities brokers, scheduled banks, development finance institutions (DFIs), and mutual funds, who can now directly participate in the book building process.
The new framework allows these participants to place bids directly into the book building system, either on their own behalf or for their clients. Investors also have the option to submit disclosed or undisclosed bids, ensuring confidentiality where required.
The upgraded system is expected to broaden participation, improve market efficiency, and increase competitiveness. It integrates the PSX’s book building system with NCCPL’s functions for the collection, settlement, and refund of margin money, leveraging the capital market’s existing technological infrastructure.
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