Legal Dictionary of Pakistan

preemptive right

A shareholder's privilege to purchase newly issued stock - before the shares are offered to the public - in an amount proportionate to the shareholder's current holdings in order to prevent dilution of the shareholder's ownership interest. 9 This right must be exercised within a fixed period, usu. 30 to 60 days. - Also termed subscription privilege. See SUBSCRIPTION RIGHT. Cf. rights offering under OFFERING.