The Securities and Exchange Commission of Pakistan (SECP) has sought public comments on a proposed accreditation framework aimed at establishing professional standards for official liquidators, provisional managers and insolvency experts involved in corporate liquidation and rehabilitation proceedings. The proposed framework is designed to strengthen the professional capacity available for handling financially distressed companies and corporate winding-up matters under Pakistan’s existing legal framework. Through the consultation process, the regulator is seeking feedback on measures intended to improve the administration of insolvency-related proceedings and create a more structured pool of professionals capable of managing these cases.
The proposed framework covers proceedings conducted under the Companies Act, 2017 and the Corporate Rehabilitation Act, 2018. According to the proposal, its broader objective is to improve the efficiency and transparency of corporate liquidation and rehabilitation processes while ensuring that the interests of creditors receive appropriate consideration. The framework also seeks to support the rehabilitation of businesses that remain viable despite financial difficulties. By creating professional requirements for individuals responsible for these proceedings, the SECP aims to establish clearer standards for the management of company winding-up cases as well as rehabilitation processes involving financially distressed businesses.
A central component of the proposal is a professional certification requirement for individuals seeking empanelment as official liquidators and insolvency experts. The requirement would also apply to professionals who are already empanelled by the SECP. Under the proposed arrangement, these practitioners would need to obtain a professional certification in insolvency practice from the Institute of Financial Markets of Pakistan (IFMP). The certification programme would consist of three stages and would include both written and oral examinations. In addition to the examination requirements, professionals would also be expected to meet annual continuing professional development requirements, creating an ongoing learning component for practitioners working in the insolvency field.
The proposed accreditation framework also sets out measures concerning official liquidators and provisional managers, with a particular focus on professional conduct during insolvency proceedings. A code of conduct has been proposed for official liquidators and provisional managers who perform an interim role in proceedings. The inclusion of such a code is intended to establish professional standards for individuals carrying out responsibilities during corporate liquidation and rehabilitation cases. The framework therefore combines certification, examination and continuing professional development requirements with conduct-related provisions covering professionals involved in these proceedings.
The SECP said the proposed measures respond to capacity gaps identified in the World Bank’s 2022 Report on the Observance of Standards and Codes. The framework also draws on practices followed in several other jurisdictions, including the United Kingdom, Singapore, Malaysia and India. These international references form part of the basis for the proposed approach as the regulator considers ways to strengthen professional capabilities within Pakistan’s insolvency system. The proposal consequently links domestic regulatory requirements with practices observed in established insolvency frameworks in other countries.
The accreditation proposal comes as part of efforts to provide a more structured professional framework for managing corporate distress, liquidation and rehabilitation matters. The SECP’s proposed requirements would introduce formal certification and continuing professional development for practitioners seeking or holding empanelment, while the proposed code of conduct would establish additional expectations for official liquidators and provisional managers. Together, these measures are intended to address professional capacity requirements and provide a clearer framework for individuals responsible for insolvency-related proceedings under Pakistan’s corporate laws.
The SECP has made the consultation paper available on its website and has invited stakeholders and members of the public to submit their comments on the proposed accreditation framework. The consultation process will allow relevant parties to review the proposed certification, examination, professional development and conduct requirements before the framework is finalised. The outcome of the consultation will help inform the regulator’s approach to establishing accreditation standards for insolvency professionals responsible for corporate liquidation and rehabilitation proceedings in Pakistan.
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