SECP Introduces E-IPO and E-Dividend Concept for Capital Market

In order to facilitate the public by providing efficient, easy and hassle-free mechanism to apply for subscription of securities of companies offered for sale through initial public offerings (IPOs), Central Depository Company (CDC) with active support of 1Link (Guarantee) Limited and under the guidance of the Securities and Exchange Commission of Pakistan (SECP) and State Bank of Pakistan (SBP)  has introduced the concept of centralized e-IPO system (CES).

Under the newly introduced Centralized e-IPO system, application for subscription of securities can be made electronically. Investors having a valid CNIC, bank account with any scheduled bank and CDC account can electronically register themselves “24/7 throughout the year” . Only registered investors can apply for the subscription of securities through any of the banking channels (ATM, net banking, mobile App and over the counter).

Furthermore, CDC, with the lead support of the SBP, is in the process of introducing e-dividend concept. The implementation of e-dividend concept will assure electronically credit of dividend into the bank accounts of the investors.

On the one hand, e-IPO system will, increase the outreach of IPOs, promote the culture of keeping securities in book-entry form and will make the IPO process more user-friendly and efficient.

On the other hand, e-dividend concept will remove the inefficiencies relating to the payment of dividend through dividend warrants.

With the active support of the SBP, the SECP has instituted various measures to utilize the efficient banking channels to support a more efficient and hassle-free mechanism for investors of capital market.

Courtesy by Investorslounge