SECP directed companies to maintain their websites properly and provide all mandatory information to stakeholders.
Websites of companies, being the virtual face of entities, are an effective tool for dissemination of material information to the public.
The SECP, as a first step in this direction, issued a notification dated July 10, 2014, requiring all public companies to maintain functional websites with effect from August 30, 2014. The aforementioned notification also prescribed relevant content to be displayed on the websites of companies.
In order to facilitate the companies in understanding and implementing this mandatory requirement, the SECP also issued guidelines for companies to maintain their websites. In a subsequent notification on July 1, 2015, the companies were further required to place the web link of investor education portal, Jamapunji, on their websites.
Consequently, keeping in view partial and convenience-based disclosure adopted by some companies, Circular 43 of 2015, was issued on December 2015 to reinforce that companies should display all, relevant information on their website by following the sequential order in line with the earlier directions of the Commission.
Moreover, in view of the diversity of stakeholders, especially shareholders accustomed to Urdu, companies were directed to keep certain information in Urdu on their websites through its notification issued on December 10, 2015.
For shareholders’ facilitation and pictorial guide to companies, snapshot of sample website (in English and Urdu), is also as placed on the SECP’s website.
It is, however, noted that despite lapse of considerable time, companies are not adhering to directives in letter and spirit. The SECP, is thus rigorously seeking compliance by companies by issuing notices and initiating proceedings against defaulting companies.
During the year ending June 2016, proceedings against 36 companies were initiated and concluded by issuing 28 orders. Since July 2016, 26 show-cause notices have been issued to defaulting companies and 11 orders have been issued. It is also noted with concern that companies are omitting or disclosing partial/ distorted information regarding board of directors, financial statements and investor complaint mechanism.
This practice defeats the very purpose of timely, accessible and legible disclosure of information on the website. One of the key objectives of Companies Ordinance, 2016, is to encourage use of technological tools. The 2016 ordinance requires companies to display information, notices and financial statements on website.
Moreover, for shareholders, the main source for obtaining quarterly results is now through website of companies hence functional website is even more imperative than it was in the past. Therefore, while it is re-emphasised to timely place all announcements/ notices, financial statements for dissemination purposes, the investor complaints’ resolution and query mechanism plays a pivotal role in interaction with all stakeholders specially shareholders. Companies are therefore encouraged to give all relevant information in addition to that prescribed under the SECP’s directives for facilitation of stakeholders.
The SECP, itself, has also launched a bilingual website, in Urdu and English. The focus of all the directives of SECP since 2014 are not just confined to display of information rather companies can use the website for synergizing with investors, both current and prospective. The SECP, through its directives, anticipates clarity, accessibility, facilitation and uniformity in information disclosed on the website.