The Securities and Exchange Commission of Pakistan (SECP), working with the Pakistan Stock Exchange (PSX), has invited stakeholder comments on proposed amendments to PSX regulations that would introduce a dedicated framework for companies seeking to attain a listing through a court-sanctioned scheme of arrangement. The initiative responds to a recent trend of unlisted companies becoming listed through schemes with listed companies without going through the public offering regime and PSX listing requirements. Under the draft regime, an unlisted company would only be able to obtain listing status through a scheme of arrangement involving the demerger of an “Operating Business Segment” of a listed company into an unlisted company. The amendments set criteria for an operating business segment, requiring it to be a revenue- and expense-generating business unit, to have been profitable in the last financial year, and to represent at least 10% of the listed company’s total revenue or total assets. The proposal also sets out procedural requirements, including obtaining a prior PSX no-objection certificate before entering into the scheme, meeting conditions such as a clean track record of sponsors and directors, minimum free float and specified disclosures, and allowing PSX to reject applications that do not meet the listing requirements. PSX has published the draft amendments on its website and is accepting feedback until April 16, 2025.

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