Respected Citizen, Our standard business time for taking calls is from 9 am to 5 pm Monday to Friday. From 1 pm to 2 pm lunch break is observed. During Ramadan, our timings are 10 am to 4 pm. For lodging complaints and queries, the SDMS portal ( should be your first choice. Alternatively you may write to us at and

Insurance Sector

From an economic point of view, insurance is an arrangement for reducing financial risk by transferring it from a policy holder to an insurer. The social aspect of insurance involves the collective bearing of losses through contributions by all members of a group to compensate for losses suffered by a few group members. From a business viewpoint, insurance achieves the sharing of risk by transferring risks from individuals and businesses to financial institutions specializing in risk management. Lastly, from a legal perspective, insurance is a contract whereby, in consideration of a premium received, a person promises to make payment to another person, in case of happening of an event specified in the contract due to which second person suffers a loss. The party bearing the risk is known as the 'insurer' or 'assurer' and the party whose risk is covered is known as the 'insured' or 'assured'.

Insurance is based on a mechanism called "risk pooling", or a group sharing of losses. People exposed to a risk agree to share losses on an equitable basis. They transfer the economic risk of loss to an insurance company. Insurance company collects and pools the premiums of thousands of people, spreading the risk of losses across a group of participants.

Islamic Concept of Insurance (Takaful) - Shariah-based Approach to Protect You and Your Family. “Originated from Arabic language and supported by Shariah. It means “Joint or Mutual Guarantee” whereby participants pool their resources in order to help other fellow muslims in the time of need based on the Islamic principles of brotherhood and mutual solidarity.

In case of life insurance policy(not being group life policy) having a term of more than 1 year the policyholder may opt to cancel the policy within 14 days of the commencement of the insurance policy .An insurer is required to refund the entire amount except medical expenses in case of such cancellation.

The insurer will make a structured telephonic call within free look period to all policy holders to confirm their understanding of the product and its appropriateness. If the policyholder is not satisfied and gives an adverse response, the insurer will return the premium to the policyholder within 30 days of such call. The Company is required to retain the call record for at least 5 years or maturity of the product whichever is earlier.

Once the amount of claim is ascertained by the insurer and the policyholder fulfills all requirements for filing the claim. In case of delay by the insurer in settlement of claim beyond 90 days, the policyholder would be entitled a sum in addition to his claim unless such insurer proves that such failure was due to circumstances beyond his control

If the insurer has failed to settle the dispute then the complainant may approach these forums for resolution of the complaints: • The Federal Insurance Ombudsman • The Insurance Tribunal • Small Disputes Resolution Committees • Securities and Exchange Commission of Pakistan

The office of the Insurance Ombudsman is an autonomous national dispute resolution body which independently and impartially resolves insurance disputes, between insurance policyholders and participating companies, absolutely free of cost. The office of the Insurance Ombudsman is fully operational since May 2006. The Section 127, of the Insurance Ordinance, 2000 formulates operational parameters of the Office of the Insurance Ombudsman. On complaint of the aggrieved person, the Insurance Ombudsman may undertake any investigation into any allegation of maladministration, on part of any insurance company, provided that the matter is not with the Wafaqi Mohtasib (Federal Ombudsman), court of competent jurisdiction, tribunal or board in Pakistan. Mal-administration is defined by the Insurance Ordinance, 2000 as corruption, nepotism, neglect, inattention, inordinate delay, incompetence, inefficiency and ineptitude in the administration or discharge of duties and responsibilities

The procedure as laid down under Section 129 of the Insurance Ordinance, 2000 and is summarized as follows: Before making a complaint, the complainant is required to intimate in writing to the concerned insurance company his intention of filing a complaint. If the insurance company either fails to respond, or makes a reply which is unsatisfactory to the complaint, within a period of one month, the complainant may file a complaint at any time after that within a further period of three months. A complaint should be made on solemn affirmation or oath in writing addressed to the Insurance Ombudsman. The complaint shall set out the full particulars of the complaint matter and the name and address of the complainant. Copy of the notice sent to the insurance company along with postal/courier receipt should also be attached with your complaint. In all cases, three (03) complete sets of complaint are required to be filed with the Ombudsman, the address and phone numbers are mentioned as under: FEDERAL INSURANCE OMBUDSMAN SECRETARIAT 2nd Floor, Pakistan Red Crescent Society Annexe Building, Plot # 197/5 Dr. Doud Pota Road Karachi Phone: 021-99207761-62 Website:

Insurance Tribunal in the general sense is a body, constituted under the Insurance Ordinance by the Federal Government, with the authority to judge, adjudicate on, or determine claims or disputes. In essence it is a specialized court formed for the disposal of cases pertaining to the Insurance business. According to the Insurance Ordinance, 2000 the Tribunal consists of a Chairperson who is a serving or retired judge of the High Court, with two or more members having ability and integrity to enable them to discharge the duties and functions of the Tribunal. In October, 2006, the Federal Government, in consultation with the Chief Justices of Sindh High Court, Lahore High Court, Peshawar High Court and Baluchistan High Court, conferred powers in each province on the District and Session Courts to exercise territorial jurisdiction specified 1. Additional District & Session Judge at all District Headquarters in the Province of Punjab 2. District & Session Judge Karachi (Central) Whole Province of Sindh 3. District & Session Judge Peshawar Whole Province of Khyber Pakhtunkhwa 4. District & Session Judge Quetta Whole Province of Baluchistan To initiate proceeding against the insurer in the insurance tribunal, prior approval from the Commission is required under section 162 of the Insurance Ordinance, 2000. Section 162 (1) of the Insurance Ordinance, 2000 states that: POWERS OF THE INSURANCE TRIBUNAL The Insurance Ordinance, 2000 confers following powers to the Tribunal: The Tribunal has all the powers vested in a civil Court under the Code of Civil Procedure, 1908.In its criminal jurisdiction, the Tribunal has the same powers as are vested in the Court of Sessions under the Code of Criminal Procedure, 1898. The jurisdiction of a Tribunal shall not extend to appeals to the Appellate Bench and Courts, as mentioned in the section 33 and 34 of the SECP Act 1997. APPEAL AGAINST THE INSURANCE TRIBUNAL The decision of the Tribunal on any application is final and cannot be questioned in any Court or before any other authority. If the amount of the claim is not less than one hundred thousand rupees, the aggrieved may file an appeal to the High Court, within a period of thirty days from the date of such decision. An appeal is heard by a Bench of more than two judges of the High Court, having territorial jurisdiction over the relevant Tribunal.

The Commission has promulgated the Small Dispute Resolution Committees (Constitution and Procedure) Rules, 2015, vide S.R.O. 829(I)/2015 dated August 18, 2015, whereby three Small Dispute Resolution Committees were constituted in the cities of Karachi, Lahore and Islamabad. The role of the Committee is to arbitrate /resolve the disputes among the policyholders and insurance companies. Each Committee is comprised of three members (a chartered accountants / cost and management accountant, an advocate and a senior insurance industry professional).The Committees prefer amicable resolution of the disputes through negotiation, mediation and conciliation. The Committees resolve the dispute within a period of 45 days. The Committees have the power to call for written submissions from the parties in the dispute. Furthermore, the Committees have the power to call the parties to the dispute for hearing. The following limit applies to the Small Dispute Resolution Committee: Nature of the Underlying Insurance Policy Maximum Sum Insured Individual life contract Rupees Two Million Five Hundred Thousand Only Domestic insurance policy Rupees Five Million Only Private motor insurance policy Rupees Two Million Five Hundred Thousand Only Any Insurance claim over and above the stated limits is out of the Jurisdiction of the Committees. However, the matter can be taken up with other appropriate forum. Complaints can be forwarded to the Official Coordinators of the respective Committees at the following address: Official Coordinator, Small Disputes Resolution Committee (Islamabad) The Management Executive, Insurance Division, 3rd Floor, NIC Building, 63-Jinnah Avenue, Blue Area, Islamabad. Phone: 051-9207091-4 ext 439 Official Coordinator, Small Disputes Resolution Committee (Karachi) The Deputy Director, Specialized Companies Division, 5th Floor, State Life Building No. 2, Wallace Road, Off. I. I. Chundrigar Road, Karachi. Phone: 021-32414204 Official Coordinator, Small Disputes Resolution Committee (Lahore) The Additional Joint Registrar, Company Registration Office – Lahore, Associate House, 3rd & 4th Floor, 7-Egerton Road, Lahore. Phone: 042-99204962-66 ext:28 The Territorial Jurisdiction of each Committee Detail of the territorial jurisdiction of each Committee to arbitrate /resolve the disputes among the policyholders and insurance companies shall be as under:- a. Small Dispute Resolution Committee (Karachi): Complaints I disputes escalated from the provinces of Sindh and Baluchistan; b. Small Dispute Resolution Committee (Lahore): Complaints I disputes escalated from the eastern side of the province of Punjab (All districts of Punjab except Bakkar, Khushab, Mianwali, Jhelum, Chakwal, Rawalpindi and Attock); and c. Small Dispute Resolution Committee (Islamabad): Complaints I disputes escalated from the Islamabad Capital Territory, province of Khyber Pakhtunkhwa (including Gilgit Baltistan/Federally Administered Tribal Areas), Azad Jammu & Kashmir and the western side of the Punjab.

The SECP plays a facilitating role by taking up complaints with the respective insurers. Following points should be taken into account before lodging a complaint with the SECP. Policyholders who have complaints against insurers are required to first approach the Grievance/ Claims/ Complaints Cell of the concerned insurer. If they do not receive a response from insurer within a reasonable period of time or are dissatisfied with the response of the company, they may then approach the SECP for the resolution. SECP’s Role in Complaint Handling In case of any complaint against an insurance company, , the same is forwarded to the company for its resolution. Regular follow-ups are made and SECP intervenes to ensure that the matter is resolved as per the terms and conditions of the insurance policy. The complaints need to be forwarded to the address given below: The Executive Director, Insurance Division, Securities & Exchange Commission of Pakistan Insurance Division, 3rd Floor, NIC Building, 63-Jinnah Avenue, Blue Area, Islamabad. Or alternatively, they may be emailed to Only cases of grievances relating to policies and claims are taken up by the SECP with the insurers for speedy disposal. Alternatively, the insurance policyholders may approach the other available forums such as the Federal Insurance Ombudsman, Small Disputes Resolution Committees, Consumer Protection Forum or the Civil courts for such complaints. • complainants are requested to fulfill the following preruisites in order to file complaint: 1. Complete details of the complaint along with a copy of the correspondence with the insurer and their outcome. 2. Policy Number along with copy of policy documents (if available). 3. Contact details (Postal Address, email and Cell/Phone Number). 4. Copy of CNIC of policyholder (Nominee and deceased in case of death claim).

An insurance claim is a notification to an insurance company requesting payment of an amount due under the terms of the policy. This is the right of the policy holder. In case of death of the policy holder the claim can be filed by the nominee as agreed upon at the time of issuance of the policy. There are certain guidelines outlined by the company that have to be met while filing a claim. • In case of non-death claim, the policyholder has to contact the claims department of the insurance company as soon as the loss is incurred. In the event of death of the insured, the nominee of the policy has to make claim; • If certain time limit for making claims is specified in the insurance policy terms and conditions, the policyholder is bound to make claim within that specified time limit. Nevertheless, it is in best interest of the policyholder to intimate the insurance claim to the insurance company as soon as possible, as earlier the claim is made, sooner will it be processed; • The policyholder is suggested to obtain the contact details of the claims department of the insurance company at the time of the buying the insurance policy; • Policyholder ought to make claim in writing if policy terms explicitly require so; • The insurance company will require certain documents pertinent to claim processing as mentioned in the policy document. It is the responsibility of the policyholder to provide all documents as required and mentioned in the insurance policy document; • The insurance company will decide on the claim and inform the policyholder or his/her nominee, accordingly after which the claim payment will be made. It is important to note that only the nominee or beneficiary is entitled to receive the insurance claim amount; • If dissatisfied by the insurance company’s decision, the policyholder has the right to follow the complaint lodging procedure.

Following documents are required to be submitted for claiming death insurance: • Insurance company’s standard claim form duly filled; • Death certificates as may be issued by the National Database Registration Authority (NADRA) or the Union Council or the Hospital; • Original insurance policy documents; • Copies of the Computerized National Identity Card (CNIC) nominee/ beneficiary and the deceased; • Police report and post mortem report, in case the death occurred due to accident; • Hospital and medical records, if applicable; • Any other document as may be prescribed;

Following documents are required to be submitted for claiming disability insurance: • Claim forms; • Hospital /medical records, X-rays and other treatment records, wherever applicable; • Disability certificate from an authorized doctor or as stated in the insurance policy document; • Police report and MLO report, wherever applicable; • Any other document as may be prescribed under the insurance policy; It is to be noted that the above mentioned is only a general list of documents and requirements may vary from insurance company to company and insurance policy to policy.

General insurance helps us protect ourselves and the things we value, such as our homes, our cars and our valuables, from the financial impact of risks, big and small – from fire, flood, storm and earthquake, to theft, car accidents, and travel mishaps. And we can choose the types of risks we wish to cover by choosing the right kind of policy with the features we need. • In the event of a loss, policyholders or beneficiaries, as the case may be, should immediately notify the claims department of the respective Company via email / Fax / Letter or over the telephone as soon as possible • Where applicable, the Insured should report the event to the Police and register FIR as soon as possible. • The insured should provide required documents to the Company. • Company appoints surveyor who inspects the insured asset and submits the survey report. • Based on the surveyors report and his assessment of the loss as per the terms and condition of the policy, the claim is processed by the Company. • After approval of the claim the payment cheque is released

Company Registration/Compliance

SECP has established nine Company Registration Offices (CROs) in all major cities (Islamabad, Karachi, Lahore, Peshawar, Quetta, Faisalabad, Multan, Sukkar & Gilgit Baltistan) across Pakistan to facilitate registration of companies. In addition, SECP has established a Capital Market Hub at Abbottabad, and Facilitation Counter at Sialkot. SECP has also published guidebooks in different languages for company registration and post incorporation requirements which are available on its website. To assist promoters, various helpful features have been provided through the Commission's website including name search facility, model memorandum and articles of association of major business sectors, forms and templates of applications, etc. For urgent processing of cases, the Fast Track Registration Services is also available. To facilitate fee payment, SECP has also allowed use of online fund transfer and credit card facilities. Further, a complimentary/free of cost set of company formation documents is provided to investors.

An individual can register the Company either through manual filing of application in the relevant Company Registration Office or through the Commission's online eServices.

Company registration is a two step procedure: 1) Availability of Name: First step towards incorporation of a Company is to obtain availability of name from the Company Registration Office. 2) Application for incorporation: An applicant subject to grant of availability of name can make an application either online or in physical form to the Company Registration Office for incorporation of company along with the following documents – a) Copy of the valid name reservation letter / email. b) Form 1 (Declaration of applicant for incorporation) c) Form 21 (Notice of situation of registered office of proposed company). d) Form 29 (Particulars of the first directors of the company). e) Memorandum and Articles of Association; f) Copies of CNIC/NICOP/POC of the subscribers/witness/ Nominee (in case of single member company)/Copy of Passport in case of foreigner; g) Original challan evidencing payment of registration and filing fee; h) Following documents may also be required on a case to case basis: (i) In case of physical filing, authority letter signed by all the subscribers in favor of one of them or authorized representative; and (ii) In case of specialized business, copy of NOC/Letter of Intent/ License (if any) of the relevant regulatory authority.

Yes, you can reserve the name of Company of your choice unless the name of Company is not such that which is prohibited under the law (Section 37 of the Companies’ Ordinance, 1984). There are certain prohibitions and restrictions, the applicant has to look into while choosing a name for a company. In this regard, it must be ensured that the name chosen for the proposed company is neither inappropriate, deceptive or designed to exploit or offend the religious susceptibilities of the people, nor identical or closely resembling with the name of an existing company. You may refer to availability of name Guide available on our website Further, you may avail the name search availability through our eServices Portal

a) Annual return in Form A and Form 29 b) Annual audited accounts in case of private companies having paid-up capital of Rs. 7.5 million or above.

Yes. You have to make an application to the Company. The Company after making such inquiry as it may deem fit shall subject to such terms and conditions, if any, issue the duplicate share certificates. (Section 75 of the of the Companies Ordinance, 1984),

Yes, you may close down your Company subject to certain terms and condition as mentioned under the Company Easy Exit Scheme Regulations, 2014 by filing an application with the concerned Registrar. The Registrar after confirming compliance with the formalities, may strike off the Company under Section 439 of the Companies Ordinance, 1984.

eServices is a 24/7 available portal developed by SECP to facilitate the users in reservation of name, incorporation of companies, filing of specified forms and related documents required under the Companies Ordinance, 1984, or the Rules and Regulations being administered by SECP, in electronic form to the Registrar of Companies for registration. eServices can be accessed through SECP’s website at

A personal computer equipped with a web browser and internet access, preferably broadband connection.

Any person can register as an Individual User. This may include a director /chief executive/ company secretary /authorized representative / manager / authorized person of a company who is a natural person and is authorised to sign documents electronically on behalf of the company. An Intermediary / Consultant can also register as a user of the e-Services.

Online user registration is available at eServices at, for which Rs. 100/- only will be charged subsequently after registration and at the time of submission of documents. Please refer to User Registration Guide for detailed guidance.

For Individual (Pakistani National): CNIC/NICOP/POC, Mobile number, & Email address. For Individual (Foreign National): Attested copy of valid passport, Attested photograph, Mobile number, & Email address.

Capital Markets

The Securities Market Division (SMD) is responsible for monitoring, regulating, and developing the securities market. It regulates the primary and secondary markets as well as market intermediaries through registration, surveillance, investigation, enforcement, and rule making, with the objective of protecting investor interests. The SMD also processes and grants approvals to prospectuses for public offering of both debt and equity securities. In addition, it institutes appropriate regulatory reforms to develop and promote the market, engender investor confidence and instill transparency, effective risk management and good governance at the Stock Exchange, Pakistan Mercantile Exchange, Central Depository Company and National Clearing Company. The division has four departments: a. Policy, Regulation and Development Department b. Public Offering and Regulated Persons Department c. Surveillance, Supervision and Enforcement Department d. Commodity Market Department

It formulates the regulatory framework of Pakistan Stock Exchange, the CDC and the NCCPL. This entails devising regulatory framework for these capital market entities for improved risk management in their operations and procedures, introduction of new products and systems, good governance, increased transparency and improved investor protection etc. PRDD is also responsible for continuously reviewing and revamping the existing regulatory framework in view of the changing market needs and to keep abreast of international developments, including compliance with relevant IOSCO Objectives and Principles of Securities Regulation.

The division has four departments: a) Beneficial Ownership Wing It monitors the trading activities of specified officers and more than 10% shareholders of all listed companies to protect the interests of small shareholders of listed companies. Such beneficial owners are discouraged to make a windfall gain. Thus, in compliance with section 103 of the 2015 Securities Act every director, chief executive, company secretary etc. and every person who is a beneficial owner of more than 10% of a listed equity security is required to file a return of beneficial ownership within 7 days of the attaining of status of beneficial owner and to report changes in shareholding within 7 days of the change. b) Takeovers Wing Takeovers: Chapter IX of Securities Act, 2015 (Act) ensures fair and transparent takeover of the companies listed on Pakistan Stock Exchange Limited. The Act in conjunction with Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations 2008 (the “Takeover Regulations 2008”) provides for an equivalent and fair opportunity to the investors to acquire the substantial voting rights of the listed companies simultaneously safeguarding the rights of the minority shareholders. c) Brokers' Registration and Investor Complaints Wing It registers brokers and agents of stock exchanges and brokers of mercantile exchange. It also handles investor complaints against brokers of stock exchanges. The registration of brokers and agents establishes a direct regulatory nexus for ensuring investor protection and observance of Code of Conduct by brokers and agents. The wing plays an instrumental role in ensuring effective resolution of investor complaints and grievances, particularly those of small investors.

It is responsible for monitoring and vigilant surveillance of the trading activities carried out at the Pakistan Stock Exchange Limited to ensure that market participants are not exposed to manipulation or any unfair play. It keeps a close watch on price movements of scrips, monitors abnormal prices and turnover. This department is also entrusted to ensures compliance with relevant rules and regulations by Self-Regulatory Organizations including regulated securities activities through risk based inspections to strengthen the market oversight and enforcement through offsite inspection. This department also conducts investigations to determine non-compliances by licensed person(s).

It designs and administers SECP’s commodity market reform agenda, including review and formulation of regulatory policies and framework; managing licensing, renewals and governance affairs of futures exchanges and brokers; implementation of structural reforms; and introduction of new products.

A stock exchange, share market or bourse is an organization which provides "trading" facilities for stock brokers and traders, to trade shares of the listed companies and other financial instruments such as Term Finance Certificates and Derivatives. Stock exchanges also provide facilities for the issue (listing), redemption (delisting) of securities and other capital events including the payment of income and dividends.

A commodity exchange is an organization which provides trading facilities for commodity brokers and traders to trade futures contracts in various commodities and financial instruments such as gold, crude oil, silver, and currencies.

A stock/commodity broker is a person who facilitates the investor to trade in stock/commodity exchange against fee or commission.

A stock broker is Trading Right entitlement certificate holders (TREC) Registered with Pakistan Stock Exchange who has the right to execute trade in the stock exchange. The list of registered stock broker/TREC holder can be accessed from website of Pakistan Stock Exchange (PSX) or the Commission’s website www.

An investor can confirm the status of a broker by visiting the website of www. or can text the registration number of the broker at 8181 to get its registration status. Further he can also visit SECP investor portal www. JAMAPUNJI.COM for additional information. The broker website may also be visited to get the information about services being offered by him.

You can buy shares when a company offers its shares through IPO or you can buy shares through a stock broker in the stock market once they are in circulation and being traded. For investment through stock exchange, an investor can approach stock broker registered with Pakistan Stock Exchange and licensed by the Commission to buy or sell shares against agreed fee or commission.

You can buy/sell futures contracts in any commodity either through a commodity broker or online using your login and password.

An investor should take investor account opening form from registered stock/commodity broker and fill it properly. Investor should ensure that account opening form should contain all details which have been provided in Rule Book of Pakistan Stock exchange (PSX)/Pakistan Mercantile Exchange (PMEX). Investor should ensure that account opening form should contain all details which have been provided in Rule Book of Pakistan Stock exchange (PSX) in case of stock broker. All applicable fields should be filled in and non-applicable fields must be clearly marked as Not Applicable.

An investor should read carefully all instructions contained in the account opening form from registered stock broker and fill it properly. In case of any ambiguity, investor should immediately approach the stock/commodity broker. In case of dissatisfied reply from broker, the investor should contact Pakistan stock exchange/PMEX or SECP. An investor should keep a dully filled/signed copy of account opening form for his record.

An investor should provide all requisite documents for opening of account with stock/commodity broker specially his/her CNIC, or proof of his/her nationality and registered mobile number and email address.

Investment in stock market is a risky business. Investor should be well aware that prices of share can move up or down depending on the market forces. Investor should do all his home work prior to make investment in shares and due consideration be given to risk factors associated with the investment in shares.

Investment in commodity futures contracts is very risk due to the element of leverage involved in commodity trading. The nomenclature of a futures contract is such that with a small margin, the investor gets substantial exposure to the underlying commodity, thereby magnifying the potential for loss in case of extreme price movements.

You can either go to the broker’s office or place an order through registered phone number making sure that your call is recorded by the broker. Once your order is placed, you should receive confirmation message from the broker regarding execution of your order.

An investor should obtain his trade confirmation regularly from the stock broker. The stock broker is required to send ledger and CDC statement(s) as per back office and CDC on quarterly basis on the email address/ registered postal address as mentioned in account opening form. However, investor may also obtain the statement as and when required from the broker. In case of any discrepancy in the statement, investor should immediately approach the stock broker for rectification. In case of dispute arise, the investor can lodge his compliant to Pakistan Stock exchange 021 111 00 11 22 or to the Commission on telephone no 051 111 117 327.

An investor should receive daily confirmation of all trades executed in his account from the broker to the registered email address of the investor. In case of any ambiguity/discrepancy, the investor should immediately contact the broker for clarification/rectification.

The complaint can be lodged vide the Service Desk Management system (SDMS) or it can be sent to the complaint cell of the Securities and Exchange Commission of Pakistan or to the Securities Market Division at “NIC Building, 63 Jinnah Avenue, Blue area Islamabad”.

Once you have bought your shares, there are two ways to hold them: as a certificate or electronically (via CDC account). Your stockbroker can advise which option depending on individual company's shares. In case of a certificate, physical shares shall be delivered to you which you should keep in safe custody. If you choose to hold your shares electronically they are placed in a nominee account with the Central Depository Company (CDC). These accounts are often run by stockbrokers who administer the shareholding on your behalf. You do not have a certificate to keep safe or deliver to your broker in time for the transaction to be completed. You remain the real owner of the shares and you shall receive the dividends, even though the shares are registered in the name of the nominee. You can also open an Investor Account (IAS) directly with the CDC, where you can transfer shares from your CDC sub-account maintained with the broker for safe keeping. IAS provides extra security, as shares held in IAS account have to be moved to CDC sub-account with authorization of the account holder before they can be traded further. Your company also provides you with copies of the company reports and with the right to vote at general meetings. When you have bought or sold the shares, your transaction is completed (or settled) electronically through a service known as National Clearing & Settlement System (NCSS). This system links banks, stockbrokers and Central Depository Company (CDC).

Costs of trading in stocks vary according to the level of service you get from your broker. You should select the service that meets your needs. The most important figure to ask your broker is about the minimum commission you will be charged. You should also ask whether there are any other charges for their services. Ask if there are any ongoing costs, other than dealing commission, each time you buy or sell.

Costs associated with trading commodity futures contracts vary with respect to the type and size of commodity traded. Investors should carefully review the commission sheet of the broker for details on commissions charged on various commodity contracts

The CDC is a company that operates an electronic share register called the Central Depositary System (CDS). CDC electronically manages book entry system for custody and transfer of securities. Investors can open their accounts directly with CDC called Investor Accounts or open sub accounts with a stock broker. Visit CDC website for further details regarding shares safe keeping. (

An investor can open his account with CDC by filling the form available with customer services centers of CDC or CDC website ( After completing the formalities of account opening, an investor can transfer his shares to CDC account.

The Takeovers

Investor should immediately inform any change in his residential address or registered mobile number to CDC

The foremost service provided by CDC is safekeeping of securities in electronic format in the CDS. CDC also provides Direct Settlement Services (DSS), whereby it assumes responsibility of settlement and safe keeping of investors’ securities. It also provides value added services which include sms alert or account statements. An investor can approach CDC to avail these services.

Clearing and settlement of all stock exchange transactions are provided by National Clearing Company (NCCPL), which acts as go between for PSX and Central Depository Company (CDC). Stock market transactions are settled on the third day after the trade. Transfers are based on trades done at PSX. Shares are transferred on settlement date (T+2) to the buyer, and the buyer pays the seller through the clearing banks within the same settlement period. Settlements of accounts are done in the clearing house through National Clearing & Settlement System (NCSS), which is a fully automated electronic settlement system. Visit NCCPL website for further details regarding clearing and settlement,

Credit Rating Companies in Pakistan

A credit rating is an assessment of an entity’s creditworthiness to pay its financial obligations. The credit rating is intended to be an independent, unbiased and professional opinion of the rating company. Credit ratings apply to debt securities like bonds, notes, and other debt instruments (such as certain asset-backed securities) and do not apply to equity securities like common stock.

Credit rating agencies are regulated by the SECP. The Credit Rating Companies Rules 1995, Credit Rating Companies Regulations, 2016 issued on August 05, 2016 and the Code of Conduct of Credit Rating Agencies issued on January 13, 2014 govern the credit rating agencies.

There are two registered rating agencies in Pakistan: (i) The Pakistan Credit Rating Agency Limited (PACRA) (ii) JCR-VIS Credit Rating Company Limited

No. SECP does not play any role in the assessment made by the rating company.

Credit ratings provide an investor with the Issuer/ entity’s ability to repay its debt and critical information to enable him to take an informed investment decision based on his risk-return preferences. These also help investors to select the appropriate investment opportunities from a large range of options available.

Credit Rating Companies (CRCs) use simple alphanumeric symbols to indicate credit ratings. A brief description of the long-term credit rating scale associated with each category on the rating scale is given below: Symbol(Rating category) Description* AAA Highest credit quality. Lowest expectation of credit risk. Indicate exceptionally strong capacity for timely payment of financial commitments. AA+ AA AA- Very high credit quality. Very low expectation of credit risk. Indicate very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. A+ A A- High credit quality. Low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong. This capacity may, nevertheless, be vulnerable to changes in circumstances or in economic conditions. BBB+ BBB BBB- Good credit quality. Currently a low expectation of credit risk. The capacity for timely payment of financial commitments is considered adequate, but adverse changes in circumstances or economic conditions are more likely to impair this capacity. BB+ BB BB- Moderate risk. Possibility of credit risk developing. There is a possibility of credit risk developing, particularly as a result of adverse economic or business changes over time; however, business or financial alternatives may be available to allow financial commitments to be met. B+ B B- High credit risk. A limited margin of safety remains against credit risk. Financial commitments are currently being met; however, capacity for continued payment is contingent upon a sustained, favorable business, and economic environment. CCC CC C Very high credit risk. “CCC” Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic developments. “CC” Rating indicates that default of some kind appears probable. “C” Ratings signal imminent default. D Obligations are currently in default. * With regard to the likelihood of meeting the debt obligations on time

Plus and minus symbols are used to indicate finer distinctions within a rating category. The minus symbol associated with ratings has no negative connotation whatsoever.

Once a credit rating is assigned and published, CRCs keep the credit rating under watch until the instrument is fully repaid. The rating watch may result in credit rating changes from time to time. All changes in CRC's credit ratings are communicated publicly through CRC's websites (, and press releases.

Credit rating is an assessment of the probability of default on payment of interest and principal on a debt instrument. It is not a recommendation to buy, sell or hold a debt instrument. Rating only provides an additional input to the investor and the investor is required to make his own independent and objective analysis before arriving at an investment decision.

Not necessarily. In most cases, a downgrade does not mean that a default is anticipated. All it indicates is that the risk associated with the debt obligation is relatively higher than what it was before the downgrade.

Ratings are based on a comprehensive evaluation of the strengths and weaknesses of the company fundamentals including financials along with an in depth study of the industry as well as macro-economic, regulatory and political environment.

Once the company has accepted a rating, CRAs continuously monitor the corporate and the rating is monitored till the life of the instrument. The process is known as surveillance. During the surveillance period, all changes affecting the company are taken into account and the rating, if necessary, is changed, upwards or downwards. In other words, a rating is valid during the life of the instrument unless is changed.

An investment grade rating signifies the rating company’s belief that the rated instrument is likely to meet its payment obligations. In Pakistan, debt instruments rated 'BBB-' and above are classified as investment grade ratings. Instruments that are rated ‘BB‘ and below are classified as speculative grade category ratings in which case the ability to meet the payment obligations is considered to be “speculative”. Instruments rated in the speculative grade are considered to carry materially higher risk and a higher probability of default compared to instruments rated in the investment grade.

No. To protect the interest of investors, SECP has mandated that every credit rating company shall, during the lifetime of the securities rated by it, continuously monitor the rating of such securities and carry out periodic reviews of all published ratings.

Rating is an opinion based on information available at a point in time with the rating company and expectations made on the basis of such information by the company. However, information can change significantly over time causing the rated instruments performance to deviate from the earlier expectations thereby affecting the future repayment abilities and thus, requiring the rating to be altered.

Initial Public Offering (IPO)

Initial Public Offering (IPO), is one of the basic components of a capital market. IPOs not only enables the corporates to raise funds from the capital market for meeting their financial needs but also provide the general public, the opportunity to invest their surplus funds in securities offered to them by the corporates. Investment in IPOs is not an ordinary business. Therefore, most of the investors are not aware of the IPO and related areas required to be studied, understood and considered. This Guide provides the investors with information they should consider when investing in the shares or any other security of a public limited company through IPO. The Guide may be useful to understand IPOs and the relating aspects before making an investment decision.

Initial Public Offering or IPO is the first time sale of securities by a company to the public. It is one of the modes of fund raising by the corporates from the capital market. IPOs, also known as the Primary Market bring together both the corporates that need funds and the investors who have surplus funds for investment. An IPO gives the investing public, particularly the small investors, an opportunity to own and participate in the growth of a formerly private limited company. Through IPOs, the corporates can offer different securities in the form of equity, quasi equity or debt. The most common securities issued in our market are the ordinary shares. IPOs are made through prospectus issued, circulated and published for information of the general public separately for each IPO before commencement of the public subscription period. Normally, IPOs include only new shares that the issuer sells in order to raise capital. However, in some cases, shares held by existing shareholders are divested through IPOs. The proceeds from the sales by selling shareholders do not go to the Issuer and instead go to the selling shareholders. Selling shareholders may include sponsors/promoters and such other early investors seeking liquidity on their investment.

The most common reason for a company to initiate an IPO is to raise additional capital. Other reasons may include monetization of the investments of early private investors, and to make the company publicly tradable enterprise. The funds raised are utilized for meeting financial needs of the corporates like financing new project/ventures, expansion of existing business, repayment of expansive loans etc.

IPOs are made through issue, circulation and publication of prospectus in the Newspapers. Prospectus is separately issued, circulated and published at least 7 days before commencement of the public subscription period for each IPO. Beside this, the Issuer i.e. the company that offers shares for sale to the public also publishes advt. in the newspapers. Prospectus is also disseminated at the website of the Pakistan Stock Exchange (PSX), the Consultant to the Issue and the Issuer. List of all the upcoming IPOs is also provided on website of PSX. If you are interested to invest in IPOs, you must regularly visit website of PSX and read the business news provided in different Newspapers.

You have to submit application on prescribed Form for subscription of shares through your bank i.e. the bank where you have bank account. The Form can be obtained from any of the bankers to the issue, the securities brokerage company and PSX. The Form can be downloaded from the website of PSX, the Consultant to the Issue and the Issuer.

To make an informed investment decision, it is critical to know about the Issuer and therefore, it is important to read the prospectus thoroughly, understand and consider the information provided therein. If possible, verification of the information, reports, claims and commitments etc. disclosed, stated and made in the prospectus, through independent sources is also recommended.

IPO is offered through prospectus, which is issued, circulated and published at least 7 days before commencement of the subscription period. Prospectus is published at least in one Urdu and one English daily Newspaper both in English and Urdu languages. Law allows publication of the prospectus in abridged form.

Before making an investment decision, it is critical to read and understand the prospectus and consider the following aspects provided in detail in the respective prospectus: (a) Company’s / Group’s profile, history and its management; (b) Nature of the business, business model/strategy of the company. Its principal products or services and their markets. Its significant suppliers and customers on whom the issuer’s business depends, and its competitive landscape and strategy to manage the risk of competition; (c) Financial and operating positon of the issuer and comparison thereof with financials of peers; (d) Capitalization of reserves during the recent years; (e) Purpose of the issue; (f) Uses of the IPO proceeds/public money; (g) Issuer’s history with respect to payment of cash dividend and its policy for future dividends. Restriction, negative covenants, if any, etc. with respect to payment of dividend; (h) Offer price and rationale disclosed for charging premium, if any, to the face value; (i) Auditors’ certificates on balance sheet and income statements, issued and paid up capital, breakup value per share and explanatory note thereto; (j) Breakup value and earning per share; (k) Outstanding legal proceedings; and (l) Risk factors, including those specific to the issue, the issuer, the capital market, the industry and the economy etc.

Any person who has valid CNIC and Bank Account with any of the commercial bank can invest in an IPO. One applicant can make only one application. Application should be made for the minimum number of shares (normally 500 shares) mentioned in the prospectus or in multiple thereof. False and fictitious applications are not allowed to be made.

Names, phone numbers and email addresses of the contact persons of the Issuer and the Consultants to the issue are provided on cover page of the respective prospectuses. The investors may consult any of the contact person for their queries.

At the time of making application for subscription of shares in IPOs, investors may opt for issuance of shares in the book-entry-form or in the physical form. The investors who have CDS account (Investor Account with CDC or Sub-Account with any of the licensed securities brokerage company) may opt for issuance of shares in the book-entry-form. The investors who do not have CDS account at the time of making application may opt for issuance of shares in physical form.

Currently, shares held in physical form are not tradable, therefore, all those investors who hold shares in physical form must open CDS account and credit their shares into the said CDS account. This will enable them to sell the shares held by them. CDS account opening Form can be downloaded from website of CDC (Central Depository Company of Pakistan Limited).

Currently, shares held in physical form are not tradable, therefore, all those investors who hold shares in physical form must open CDS account and credit their shares into the said CDS account. This will enable them to sell the shares held by them. CDS account opening Form can be downloaded from website of CDC (Central Depository Company of Pakistan Limited).

After credit and dispatch, the shares are formally listed on PSX and trading is commenced. Price of share is quoted on PSX on daily basis. Shares are traded at KATS (Karachi Automated Trading System). Shareholders can sell the shares through stock brokerage companies.

Listing means registration of a company or a security on a securities exchange for trading and display of its name and quotation of the market price of the security on the official list of the securities exchange. The securities may be of any public limited company, corporation or Government.

Securities issued to the public are listed on the securities exchange to provide the holders exit route.

In case of investment in shares, investors can be distributed the profit, if any, in the form of cash dividend. In case dividend is not paid then the profits are accumulated and it translate into the market price of the share. And so return on investment can be realized in the form of capital gain upon sale of shares. In case of Sukuk and corporate bonds (TFC etc.), investors are paid profit on periodical basis and their principal amount is redeemed as per the schedule disclosed in the prospectus. The payment is made either through dividend warrants or through direct credit in the shareholders bank account.

In the book building method, first the Floor Price (the minimum price at which bid can be made) is decided by the issuer in consultation with the Consultant to the Issue and the Book Runner. Then Strike Price (the price at which demand is raised for subscription of all the shares allocated under the book-building portion of the issue) is determined by the market forces by way of making bids through the book building system of PSX. After determination of the Strike Price all the shares allocated to the book building portion are provisionally allotted to the successful bidders and the retail investors are offered shares at the price determined through the bidding i.e. the Strike Price. It is noteworthy to mention here that in the bidding, only Institutional Investors and High-Net-Worth Individual Investors (the investors who make bid for an amount of not less than one million rupees.) are allowed to participate. (2) Whereas in the fixed price method, offer price is set by the Issuer in consultation with the Consultant to the Issue after meeting and consultation with the potential underwriters. The underwriters are independent financial institutions and stock brokerage companies licensed or allowed by SECP to undertake underwriting of public offerings. (3) From the issuer’s perspective, the higher the offering price, the more fund the Issuer can raise. The Consultant to the Issue and the Book Runner may have interest in a high price not only to meet the Issuer’s objective, but also to get high fee if it is agreed as a certain percentage of the fund raised. At the same time, the Consultant to the Issue and the Book Runner might be wishing the offer price is set at a level that is attractive for the investors, as ultimately they are responsible for concluding the IPO successfully.

For the purpose of this Guide, security means ordinary share, preference shares, Sukuk, Participation Term Certificates (PTCs), Mushariak Certificates (MCs), Participation Term Certificates (TFCs), Commercial Papers (CPs) etc. For detail, please refer to the Securities Act, 2015.

For the purpose of this Guide, prospectus is a legal document prepared by the Issuer offering its securities for sale to the public. The prospectus contains material information, reports, statements and disclosures relating to: (i) the issue like the offer price, issue size, allocation to various category of investors, offering method, subscription period, procedure of making application for subscription of the securities, minimum application size, procedure for payment of the subscription money, basis of allotment, application form and instructions, utilization of the IPO proceeds etc.; and (ii) the issuer like the business, sponsors, management, financial and operating positon, dividend policy, future prospectus, risk factors, subsidiaries and associated companies, legal proceedings etc.

The Public subscription period means the period during which the investors can make application for subscription of securities. Normally public subscription period comprises of two working days in case of IPO of ordinary shares whereas in case of Sukuk it may be stretched to months.

Underwriting is an arrangement through an underwriting agreement in writing between the Issuer and the underwriter through which the underwriters undertake to subscribe the unsubscribed shares, if any, at the offer price. Underwriting provide comfort to the investors that the offer price is fair and the Issuer that the required fund will raise even if the issue is not fully subscribed by the public.

The trading price may have some relationship with the offer price of the share and it is not un-common for the trading price of the share shortly after the IPO to be well above or below the offer price. Generally, the shares traded on the first day of formal listing are the shares that were sold in the IPO. Substantial supply of shares in the market may drag the trading price downward. On the other hand, the very limited supply, particularly in the case of shares in high demand, may drive the trading price on the higher side to meet the high demand.

(1) Fixed Price Method (i) Offer price is set by the issuer. (ii) Price may be at par or at premium to face value set on the basis of issuer own valuation based on the company’s financials and/or the prevalent market demand and/or the due diligence conducted by the underwriters or Pre-IPO investors. (iii) Issue is underwritten through independent institutions which provide comfort to the prospective investors as for as the offer price is concerned. (iv) Justification/basis for the offer price is disclosed in the prospectus where the issuer gives detail about the qualitative and quantitative factors. (v) Investors subscribe for the shares at the price already decided by the issuer.

The Shares Subscription Form contains contain a column on dividend mandate option. Purpose of providing column in the Form is to seek consent of the investors to pay them their cash dividend, if announced, directly into the shareholder account. This is an efficient and hassle free mode of payment of cash dividend. The IPO investors is encouraged to fill in this column to enable your company to pay you cash dividend directly in your specified bank account. The benefits of crediting dividend directly into shareholder’s bank account are as follows: (1) it is hassle free as shareholders need not to visit their banks for depositing the Dividend Warrants. (2) it is efficient as it leads to prompt credit in to the bank account of the investor through e-banking. (3) it will eliminate fraudulent encashment of Dividend Warrants. (4) It will eliminate delays/loss of Dividend Warrants in postal service.

The Takeovers

Chapter IX of Securities Act, 2015 (the “Act”) (older Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance 2002 (the “Takeovers”) ensures fair and transparent takeover of the companies listed on Pakistan Stock Exchange Limited. The Act in conjunction with Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations 2008 (the “Takeover Regulations 2008”) provides for an equivalent and fair opportunity to the investors to acquire the substantial voting rights of the listed companies simultaneously safeguarding the rights of the minority shareholders. The Takeover will trigger and accordingly required to comply with the Act, as soon as any person who acquires/acquirer; I. Who acquires voting shares, (which taken together with voting shares, if any, held by the acquirer) would entitle the acquirer to more than 10% voting shares in listed company shall disclose the aggregate of his shareholding in that company to the said company, the securities exchange on which the voting shares of the said company are listed and the Commission [Section 110] II. No person shall, directly or indirectly, acquire voting shares (which taken together with voting shares, if any, held by such person), would either entitle such person to more than 30% voting shares in listed company unless such person makes a public announcement of offer to acquire voting shares or control in accordance with this Act. [Section 111]. III. No person shall, who has acquired acquire additional voting shares in case the acquirer already holds more than thirty per cent but less than fifty-one per cent of the voting shares of a listed company unless such acquirer makes a public announcement of offer to acquire voting shares or control in accordance with this Act. [Section 111] IV. No person shall, acquire control of a listed company unless such acquirer makes a public announcement of offer to acquire voting shares or control in accordance with this Act. [Section 111]

Service Desk Management System

The Corporate Supervision Department (CSD) is responsible for regulation, monitoring and enforcement of companies listed on Pakistan Stock Exchange, and their associate and subsidiary public unlisted companies and private companies (except insurance companies, non-banking finance companies and modarabas) with relevant laws and applicable accounting standards through review of accounts, investigation, and prosecution. In case of non-compliances, necessary actions are taken against erring companies, their directors, management and auditors. The statutory framework comprises of: • Companies Ordinance, 1984; • Companies (Issue of Capital) Rules, 1996; • Companies (Audit of Cost Accounts) Rules, 1998; • Companies Share Capital (variation in rights and privileges) Rules, 2000; • Companies (General Provisions and Forms) Rules, 1985; and • Group Companies Registration Regulations, 2008. In doing so, the department ensures timely holding of annual general meetings and circulation of annual and interim accounts to the shareholders, provision of adequate information by companies in the notices to the shareholders in the matter of listed companies. The department ensures that full disclosures are made by companies in their annual audited accounts in accordance with the International Financial Reporting Standards (IFRSs), IFRS for Small and Medium-sized Entities (IFRS for SMEs) and Revised Accounting and Financial Reporting Standards (AFRSs) for Small-sized Entities (AFRS for SMEs) issued by the International Accounting Standards Board (IASB) / Institute of Chartered Accountants of Pakistan (ICAP) and notified by the Commission. Moreover, CSD monitors compliance with the Code of Corporate Governance (applicable to the listed companies only) to minimize corporate abuse. CSD also responsible to the following: • initiates and finalizes legal actions for various defaults under the statutory framework and rules and where required inspect and investigate the affairs of the companies making misrepresentations in financial statements, continuous deprivation of reasonable return to the shareholders and violation of statutory provisions of the ordinance; • examines the schemes of arrangements with regard to mergers, acquisitions takeovers and group companies’ registration and review of swap ratio calculation; • examines and grant approvals to applications regarding issuance of preference shares, shares otherwise than right and shares issued on discount to the extent of listed companies only.

CSD is responsible to route complaints relating to listed companies only. Complaints arising out of issues that are covered under the statutory framework comprising i.e. Companies Ordinance, 1984; Companies (Issue of Capital) Rules, 1996; Companies (Audit of Cost Accounts) Rules, 1998; Companies Share Capital (variation in rights and privileges) Rules, 2000; Companies (General Provisions and Forms) Rules, 1985; and Group Companies Registration Regulations, 2008.

i) Compliant not pertaining to the listed companies; ii) Anonymous complaints (except received from whistle blowers); iii) Incomplete or un-specific complaints; iv) Allegations without supporting documents; v) Suggestions or seeking guidance / explanation; vi) Seeking explanation for non-trading of shares or illiquidity of shares; vii) Not satisfied with the trading price of the shares of the companies; viii) Disputes arising out of private agreement with companies / intermediaries; ix) Matter involving fake / forged documents; x) Complaint on matters not in CSD purview; xi) Complaint about market manipulation / insider trading; and xii) Complaint about any un-registered / un-regulated activity.

Complaints that are: i) in the purview of other departments of the Commission such as relevant complaints against unlisted and delisted companies be dealt by Corporatization & Compliance Departments (C&CD) and Securities Market Division (SMD), respectively; ii) falling under the purview of other regulatory bodies such as appointment of directors of listed banking companies in accordance with the fit and proper criteria defined by the State Bank of Pakistan (SBP) and matters relating to monopoly and anti-competitive practices be dealt by the Competition Commission of Pakistan (CCP) etc.; and iii) sub-judice relating to cases which are under consideration by Court of Law, quasi-judicial proceedings etc.

An Independent Share Registrar or Transfer Agent among others carries out functions relating to: (i) maintain record of the allotment, transfer and redemption of securities of companies; (ii) maintain record of the disposal of the queries and complaints by the investors or security holders with regard to issue and transfer of securities, refund of subscription money, payment of dividend and other related matters; (iii) maintain list of members in such form and manner as required under the Companies Ordinance, 1984; (iv) maintain record of payment of dividend to shareholders as and when declared by its clients; (v) maintain record of the decisions taken by its clients relating to issue of securities and payment of profit thereon, if any; (vi) submit report to the Commission on semi-annual basis about the status of the settlement of the unclaimed dividend and undelivered shares, if any; and (vii) maintain record of the proxies of the members of its clients for the general meetings.

Yes, all listed companies have to make an appointment of Independent Share Registrar / Transfer Agent registered under Share Registrars and Balloters, Regulations, 2017 (previously Balloters and Transfer Agents Rules, 2015).

The shareholders of a listed company in all above circumstances or matters incidental thereto write directly to the Share Registrar / Transfer Agent of the Company since he has the ultimate responsibility to manage all his statutory responsibility. In case the matter has not been resolved within a reasonable time, the shareholders may refer it to the Commission for an early disposal.

Transfer of shares

Every company has to transfer the shares, debentures or debentures stock within forty five days of the application. The company shall within 30 days or where the transferee is a central depositary company within five days from the date on which the instrument of transfer is lodged with the company, will notify the defect or invalidity to the transferee who shall after removing the identified defect shall re-lodge the transfer deed with the company. The company shall not register transfer of shares or debentures unless proper instrument of transfer duly stamped and executed by the transferor and the transferee has been delivered to the company. In case of death, the legal heir(s) is / are required to produce death certificate issued by relevant authorities and to make application to the company for transmission of shares duly supported with the documentary evidence showing nomination or lawful award of shares.

A company shall issue duplicate share certificate within 45 days of an application, if the original; (i) is proved to have been lost or destroyed; and (ii) having been defected or mutilated or torn is surrendered to the company. If the company for any reasonable cause is unable to issue duplicate certificate, it shall notify the fact along with reasons within 30 days from the date of the application, to the applicant.

Directors of a company cannot refuse the transfer of any shares or debentures. However, they can refuse the transfer, if the transfer deed is for any reason, defective or invalid or conditions imposed under the law or AOA of a company have not been fulfilled.

Payment of Dividend

i) Dividend may be declared in general meeting or in case of interim dividend directors have the powers to declare it in their meeting by means of a resolution. However, dividend cannot be exceeded the amount recommended by the directors; ii) No dividend shall be declared or paid by a company for any financial year out of the profits of the company made from the sale or disposal of any immovable property or assets of a capital nature comprised in the undertaking or any of the undertaking of the company, unless the business of the company consists, whether wholly or partly, of selling and purchasing any such property or assets, except after such profits are set off or adjusted against losses arising from the sale of any such immovable property or assets of a capital nature; iii) Provided that no dividend shall be declared or paid out of unrealized gain on investment property charged to profit and loss account; iv) No dividend shall be paid by a company otherwise than out of profits of the company; v) No dividend shall be paid by a company in respect of any share therein except to the registered holder of such share or to his order or to his bankers or to a financial institution nominated by him for the purpose.

When a dividend has been declared, directors of the company cannot withhold or defer its payment. The chief executive of the company is responsible to ensure payment within a period of thirty days of its declaration. However, listed companies may apply to the Commission to withhold future dividend of such shareholders who have not submitted their respective CNIC copy, till submission of the CNIC copy.

Submission of Quarterly / Half-yearly / Annual Accounts

All companies registered under the Companies Ordinance, 1984 are required to keep proper accounting records and prepare, circulate and approve the annual audited accounts in the annual general meeting. Filing of annual audited accounts with the Registrar is mandatory to all public companies including associations not for profit and companies limited by guarantees and private companies having paid-up share capital of Rs.7.5 million or more. All company’s annual audited accounts requires circulation to its members and debenture holders at least 21 days before the annual general meeting which should have been convened within 4 months of the close of its financial year. In addition, listed companies are required to circulate its annual audited accounts to Pakistan Stock Exchange, the Commission and the members.

All holding companies, unless exempted, are required to attach its consolidated financial statements of the group to its annual audited accounts complying with the requirements of IFRS and Fourth Schedule in preparing such consolidated financial statements.

All listed companies are required to simultaneously file to the Commission / Registrar and circulate to its members, debenture holders and Pakistan Stock Exchange quarterly / half-yearly accounts within a prescribed time i.e. one month of the close of its 1st and 3rd quarter account and two months of the close of its half year. Moreover, listed companies may place these accounts on their websites instead of circulating the same to the members or debenture holders after seeking approval from the both the shareholders and Commission. However, on demand of hard copies of these accounts from the shareholders, the companies have to furnish copies of the same to respective shareholders at their registered addresses free of cost, within one week of such demand.

The annual / half-yearly / quarterly accounts are required to be approved by the directors and signed by the chief executive and at least one director. Where the chief executive is for the time being not present in Pakistan, then these accounts should be signed by at least two directors present for the time being in Pakistan.

Yes, listed companies are required to place annual / half-yearly / quarterly accounts on their websites comprising annual audited accounts for the last three financial years and quarterly accounts for the last four quarters along with financial highlights for the last five years.

General Meetings

A company registered under the Companies Ordinance, 1984 requires holding of its AGM after the first general meeting, once at least in every calendar year within a period of 4 months following the close of its financial year and not more than 15 months after the holding of its last preceding AGM. All companies may hold its AGM (other than first such meeting) beyond the period stipulated above (for maximum 60 days extension) after getting prior approval from the Registrar / Commission. Notice of AGM along with a statement of material facts (if any) shall be sent to the shareholders at least 21 days before date fixed for the meeting. In addition, the listed companies are required to publish such notice in at least one issue each of daily newspaper in English and Urdu having circulation in the province in which the company is situated.

Yes, listed companies may hold their AGM for any special reason at any other place other than the town in which its registered office is located with the prior approval of the Commission.

An AGM for listed companies requires to be held with a proper quorum i.e. not less than 10 members present personally representing not less than 25% of the total voting power unless the articles of the company provide for a larger number, either of their own account or as proxies.

The court, on an application filed within thirty days of the impugned meeting, by members not having less than 10% of the voting power in the company, may declare the proceedings of the general meeting of any company invalid by reason of material defect or omission in the notice or irregularity in the proceedings of the meeting preventing members from using effectively their rights.

The shareholders of a listed company in all above circumstances or matters incidental thereto write directly to the Company Secretary or any other designated person disclosed on the respective website of the company. In case the matter has not been resolved within a reasonable time, the shareholders may refer it to the Commission for an early disposal.

Declaring election of directors invalid

The court, on an application filed within thirty days of the date of election, by members not having less than 20% of the voting power in the company, may declare election of all directors or any one or more of them invalid by reason of material irregularity in the holding of the elections and matters incidental or relating thereto.

Investigation / Special Audit

Yes, the Commission, on an application by the members of a company holding not less than one-tenth of the total voting powers, may consider the appointment of one or more competent persons as inspectors to investigate the affairs of any company.

Yes, the Commission, on an application by the members of a company holding not less 20% voting rights, may consider appointment of an auditor to carry out detailed scrutiny of the affairs of the company.