Corporate Laws (Other laws and regulations 2)

KSE Listing Regulations

SYLLABUS
Stock Exchange Listing Rules and Guidelines especially those relating to secretarial
matters, public issue of shares, Code of Corporate Governance and Transfer pricing.
Page | 1

LISTING OF COMPANIES AND SECURITIES [3, 4]

DEALING NOT ALLOWED WITHOUT PERMISSION
The securities of the company are not allowed for dealing on KSE on Ready Quotation
Board (RQB) or Future Counter UNLESS:
(a)
company or the securities are listed; and
(b)
permission for such dealings granted under Regulations.
APPLICATION FOR PERMISSION
The permission shall be granted on application made to KSE. The application shall be on
prescribed form and with prescribed fee.
DECISION ABOUT PERMISSION
KSE shall decide about permission within 3 months. In case of refusal, reasons thereof shall
be communicated to SECP and applicant within 2 weeks.
AUTHORITY TO GRANT PERMISSION
The KSE BOD shall be sole authority for granting or refusing permission. The KSE BOD
may relax these regulations if 2/3rd of KSE BOD so resolve. KSE shall consider public
interest while granting permission.
CALLING FOR ADDITIONAL INFORMATION
The KSE BOD may require additional evidence, declarations, affirmations and information. If
additional information is not submitted, the application shall stand refused.
The applicant may move fresh application after 6 months of refusal unless BOD of KSE
directs otherwise.
Applicant company shall provide full and authentic information. All routine particulars may be
called for by the secretary of KSE.

OFFER TO PUBLIC BY COMPANIES AND MODARABAS [6A]

MINIMUM OFFER
If capital of company is upto Rs. 200 Million, at least 50% shall be offered to public.
If capital of company beyond Rs. 200 Million, higher of following shall be offered to public:
Rs. 100 Million
25% of capital
financedoctors@gmail.com (www.financedoctors.net)

ICAP Module E
MAXIMUM ALLOCATION OF CAPITAL
Allocation of capital to overseas Pakistanis shall not exceed 20% of public offer. Allocation
of share capital to employees shall not exceed 5% of public offer.
MODARABA
Page | 2 In case of Modaraba applying for listing:
30% of paid up capital shall be subscribed by sponsors, associates, friends, relatives
etc.
70% of paid up capital shall be offered to general public
RELAXATION OF REGULATIONS
The KSE may relax the regulation if satisfied that such requirements are not practicable in a
particular case or class of cases.

PROSPECTUS, ALLOTMENT, ISSUE OF SHARES, ETC [7 - 15]

CONDITIONS FOR LISTING
A company shall not be listed unless:
(a) it is a public company or enacted company;
(b) its minimum paid up capital is Rs. 50 Million; and
(c) it has made a public issue which was subscribed by at least 500 applicants.
The above requirements only apply to shares unless FG directs otherwise. Companies
registered in AJK shall also be eligible for listing. Companies may make a public offer of
securities to be eligible securities in the CDS.
SUBMISSION OF PROSPECTUS TO KSE
The prospectus or offer for sale shall be submitted to KSE for clearance before its approval
seeking application is made to SECP.
PUBLICATION OF PROSPECTUS
The prospectus/offer for sale alongwith proforma application shall be published in
newspaper (at Karachi, Lahore, Rawalpindi, Islamabad and at place where KSE requires) at
least 7 days before but not more than 30 days before the subscription list opening.
The issuer shall make available such number of copies of prospectus etc. as KSE may
determine.
APPLICATIONS FOR ALLOTMENT
The company shall accept application on identical forms. Applications shall be accepted
only through banker to the issue.
The directors or the officers shall not participate in subscription of shares offered to general
public.

Kashif Adeel

Corporate Laws (Other laws and regulations 2)

ISSUE OF SHARE CERTIFICATES
The share certificates shall be issued in such marketable lots as KSE may require.
INFORMING KSE ABOUT SUBSCRIPTION RECEIVED
The company shall inform KSE of subscription received (with certificate from bankers to the
issue) within 3 working days of subscription list closing.
Page | 3
DISPATCH OF SHARE CERTIFICATES
The company shall dispatch all share certificates, in marketable lots, within 30 days of
closing of subscription list to successful applicants under intimation to KSE. However, in
case of eligible securities, share certificates shall be directly deposited to CDC.
BROKERAGE RATE AND TIME
The offeror company shall pay brokerage (minimum 1%) to members of KSE within 30 days
of subscription list closing.
SPLITTING AND CONSOLIDATING
The company shall split/consolidate the following in marketable lots on application of holder:
Allotment letter or letters of right
(within 7 days)
Security certificates
(within 30 days)
VERIFICATION OF SIGNATURES
The company shall verify the signature of shareholders within 48 hours of his request
including request to transfer shares.
NOTICE FOR CLOSURE OF BOOKS
The company shall give a notice of at least 21 days before closure of share transfer books
to KSE. Provided that in case of company quoted at Future Counter, notice shall be given
on or before 20th day of month, of at least 21 days for book closure after the said 20th.
The closure of share transfer register shall be for:
Minimum
07 days
at one time
Maximum
15 days
at one time
Maximum
45 days
in a whole year
The company shall treat the date of posting as date of lodgment if posted documents are
received by the company before the relevant action has been taken by the company.
TRANSFER OF SHARES
The company shall issue transfer receipts immediately on receiving the shares for transfer.
The company shall not charge any transfer fee.
A listed company shall not exercise any lien or put any restriction on transfer of fully paid up
shares.

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ICAP Module E

DIVIDENDS AND ENTITLEMENTS [16 - 19]

PRICE SENSITIVE INFORMATION TO KSE
Every listed company shall keep informed KSE all decisions of its BOD related to cash
dividend, bonus issue, right issue or any other entitlement or corporate action or other price
Page | 4 sensitive information.
The KSE shall also be informed about the following in the manner prescribed:
Intimation of dividend and other entitlements shall be sent to KSE at least 21 days
before closure.
Every issuer of listed security shall send quarterly and annual financial results to
KSE.
The company shall send to KSE 300 copies of statutory report, annual report,
and audited accounts at least 21 days before general meeting.
The company shall send to KSE copies of all the notices and resolutions before
their publication and dispatch to shareholders.
The company shall send to KSE such number of copies of quarterly accounts as
prescribed by KSE.
DIVIDEND WARRANTS
Every listed company shall:
dispatch interim dividend warrants within 45 days of start of book closure;
dispatch final dividend warrants within 45 days of AGM;
intimate the KSE immediately about dispatch; and
dispatch by registered post unless required by holders otherwise.
All dividend warrants shall be encashable for 3 months from the date of issue at:
the place of registered office.
Karachi, Hyderabad, Sukker, Quetta, Multan, Lahore, Faisalabad, Rawalpindi and
Peshawar.
The KSE BOD may suspend or delist a company in case of default of regulation involving
dispatch and encashment of dividend warrants.

ANNUAL GENERAL MEETINGS ETC. [20, 21]

HOLDING OF ANNUAL MEETING
A listed company shall hold its AGM and present financial statements within 4 months of
close of financial year. A Modaraba shall hold its Annual Review Meeting of its certificate
holders and present financial statements within 4 months of financial year end. Extension
may be granted by KSE if prior approval/extension from SECP has been obtained.
FURNISHING OF INFORMATION TO KSE
The company shall furnish copies of minutes AGM and EGM to KSE within 60 days.The
company shall furnish to KSE the list of its security holders as at 31st December of each
calendar year within 30 days thereof. However, in case of security on CDS the list is made
as at 31st January and is submitted latest by 19th February.
Kashif Adeel

Corporate Laws (Other laws and regulations 2)

INCREASE OF CAPITAL AND ALLIED MATTERS [22 24]

A listed company shall immediately inform the KSE of all decisions of its BOD regarding
change in authorized or paid up capital, bonus shares, right issue or refund of capital etc.
A listed company shall issue entitlement letters or right offers in marketable lots within 30
days of re-opening of books. (in case of CDS, procedure of CDC to be followed). The bonus Page | 5
share certificates shall be issued within 45 days of re-opening of books.

CODE OF CORPORATE GOVERNANCE [37]

<Because of its considerable volume, it has been presented in separate chapter.>

TRANSFER PRICING [38]

ARMS LENGTH PRICE
A listed company shall use arms length price. However, in rare circumstances other price
may be used subject to approval of BOD, for reasons recorder, in the interest of company.
POLICY AND METHOD OF DETERMINING TRANSFER PRICES RP
The BOD of listed company shall approve the transfer pricing policy for a related party
transaction before such transaction. For each related party, methods for determining
transfer prices of various types of transactions shall be recorded.
PARTY WISE RECORD
A party wise record of related party (RP) transactions alongwith documents and application
of arms length price shall be maintained:
(i)
Name of RP
(ii)
Nature of relationship with RP
(iii)
Nature of transaction
(iv)
Amount of transaction
(v)
Terms and conditions
(vi)
Basis or method for determining considerations
(vii)
Detailed assumptions and estimates
(viii) A statement by management about arms length price.
The record of RP transactions shall be placed before Audit Committee and BOD for formal
approval (alongwith justification of departure). The record of RP transaction alongwith all
relevant documents, agreements, calculations and explanations shall be made available to
the statutory auditors for audit purposes.
INFORMING NON-ARMS LENGTH PRICE
Any officer having knowledge of non-arms length price shall inform company secretary 15
days before execution of transaction. The secretary shall notify BOD immediately.
STATEMENT OF COMPLIANCE
The companies shall publish the status of their compliance with best practice on transfer
pricing in their annual reports. The statement of compliance with best practices of transfer
pricing shall be reviewed and certified by statutory auditors.

I
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