SECP Approves New Book Building System for IPOs

The Securities and Exchange Commission of Pakistan (SECP) has approved the launch of a new Book Building System, marking a major milestone in the modernization of Pakistan’s capital market. In a statement issued from Islamabad on Tuesday, the SECP said the approval finalizes recent amendments to the Public Offering Regulations, 2017, and establishes a new operational framework for book building in initial public offerings (IPOs). The upgraded system aims to make price discovery fairer, improve transparency, and build investor confidence while broadening market participation. The SECP said the move aligns with its long-term agenda to strengthen efficiency and deepen Pakistan’s capital markets. Under the new framework, the Pakistan Stock Exchange (PSX) and the National Clearing Company of Pakistan Limited (NCCPL) have jointly developed an enhanced book-building platform aligned with the revised regulations. The biggest structural shift in the system is the replacement of the traditional Book Runner model with a new concept of Eligible Participants (EPs). This new approach allows all securities brokers, scheduled banks, development finance institutions (DFIs), and mutual funds to directly take part in the book-building process. Brokers will have access to a simplified digital interface to onboard their clients, while banks and DFIs acting as consultants in an IPO can also register investors for participation. Eligible Participants can submit bids on their own behalf or for their clients, with the added flexibility to choose between disclosed and undisclosed bids, ensuring confidentiality where required. The SECP noted that this reform will make the IPO process more inclusive and efficient, providing investors with better access and transparency. The new system is integrated with NCCPL’s existing infrastructure for collection, settlement, and refund of margin money. By combining these functions, the SECP expects smoother execution and faster settlement cycles. Officials said that the modernized system will not only expand investor outreach but also enhance the competitiveness of Pakistan’s equity market, aligning it with international best practices and improving confidence among both local and foreign investors.