ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP), in collaboration with the Board of Investment (BoI), has proposed a series of major amendments to the Companies Act, 2017 aimed at reducing regulatory burdens and improving the ease of doing business in Pakistan. The reforms are designed to streamline compliance processes, promote corporatisation, and encourage digitalisation across the corporate sector.
A key feature of the proposed amendments is the decriminalisation of certain provisions, shifting from penal sanctions to regulatory remedies and pecuniary penalties. According to the SECP, this approach is intended to enhance business confidence, promote voluntary compliance, and align Pakistan’s corporate regulatory framework with global best practices.
In response to evolving business dynamics, the SECP and BoI formed a dedicated committee to review and recommend amendments. The committee adopted a holistic approach, taking into account international standards, stakeholder feedback, operational challenges, and alignment with the SECP’s digitalisation initiative, Leading Efficiency through Automation Prowess (LEAP).
The proposed amendments target several key objectives, including reducing administrative and regulatory burdens, eliminating ambiguities and redundancies, enhancing transparency in internal company processes, and improving accountability for key company officials. Swifter enforcement mechanisms are also envisioned to strengthen governance and ensure timely compliance.
The reforms aim to position the Companies Act, 2017 as a catalyst for business growth by fostering an environment conducive to entrepreneurship and innovation. By balancing business facilitation with robust oversight, the amendments are expected to enable companies to thrive in a competitive and rapidly evolving economic landscape.
Corporate governance will also be strengthened under the proposed changes, with the adoption of globally recognised governance principles and the introduction of proportionality in the applicability of financial audits and filing of financial statements based on company size. This approach is intended to reduce unnecessary compliance burdens on smaller companies while ensuring transparency and accountability.
Digitalisation forms a central pillar of the proposed amendments. Companies will be encouraged to adopt electronic filing and record-keeping, facilitate remote participation in corporate meetings, and implement stronger digital systems for accounting, data maintenance, and data protection. These measures are expected to improve operational efficiency, reduce costs, and support a modern, tech-enabled corporate ecosystem.
The SECP highlighted that the scope of the amendments is comprehensive, covering multiple aspects of corporate functioning and addressing practical difficulties faced by businesses. By introducing these forward-looking reforms, the commission aims to make Pakistan a competitive, transparent, and business-friendly destination for corporate activity, fostering an ecosystem that supports growth, compliance, and innovation.
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