Pakistan makes major strides in regulatory reforms

Pakistan has taken bold steps forward in modernising its regulatory landscape, delivering significant enhancements to anti-money laundering safeguards, corporate transparency, and the simplicity of starting a business, initiatives that have positioned the country as a more competitive and compliant player on the global stage.

At the heart of these achievements is the Securities and Exchange Commission of Pakistan (SECP), which earned the title of national "Reforms Champion" from the prime minister in December 2025 during the launch of the National Regulatory Reforms initiative. The recognition highlights the regulator's dedication to institutional integrity, digital innovation, greater ease of doing business, and updating the Companies Act, 2017, to international standards.

In the 2024-25 financial year, the SECP-led national risk assessments drove forward the AML/CFT National Action Plan and worked closely with domestic and international partners to meet the Financial Action Task Force requirements.

A key milestone was the introduction of a dedicated Corporate Ultimate Beneficial Owner (UBO) Registry through extensive amendments to the Companies Regulations, 2024. Fully aligned with OECD guidelines, the new framework requires companies to issue formal notices to shareholders to identify and verify the indirect ultimate beneficial owners – the natural persons who truly control or benefit from a company – effectively preventing the misuse of anonymous corporate structures for illicit purposes.

In February 2025, the SECP launched a risk-based beneficial ownership supervision methodology that complies completely with FATF standards. By concentrating on higher-risk cases, the system ensures ownership information remains accurate, up to date, and protected against money laundering or terrorist financing risks.

To strengthen compliance across sectors, the SECP organised 14 capacity-building sessions, both in-person and virtual, reaching over 900 participants from capital market institutions, securities brokers, non-banking financial companies, the insurance sector, and various corporate entities including limited liability partnerships. These efforts successfully promoted risk-based supervisory practices nationwide.

SECP also provided vital support to the International Monetary Fund's Governance and Corruption Diagnostic Assessment mission, coordinating with stakeholders and applying global benchmarks to advance national governance and AML/CFT priorities.

Operationally, the regulator maintained strong collaboration with the Financial Monitoring Unit to streamline Suspicious Transaction Reports and financial intelligence sharing, while ensuring swift implementation of directives from the National Counter Terrorism Authority, provincial authorities, and United Nations Security Council Resolutions on targeted financial sanctions.

For listed companies, the SECP continued rigorous enforcement of disclosure obligations. Under the Companies Act, 2017, the 2019 Listed Companies (Code of Corporate Governance) Regulations, and Pakistan Stock Exchange rules, these firms must prepare annual audited financial statements in line with Pakistan-adopted International Financial Reporting Standards, including detailed directors' reports and audits by quality-rated professionals. The statements are presented at annual general meetings, filed with the SECP, the exchange, and the registrar, and made publicly available on company and exchange websites.

Interim reporting requirements include board-approved quarterly unaudited accounts and half-yearly statements subject to limited external review. The Securities Act, 2015, mandates timely, accurate, and equitable disclosure of material or price-sensitive information to maintain market fairness.

Ownership transparency is bolstered by the Securities Act provisions requiring prompt notification of changes by directors, executives, and major shareholders, alongside accessible registers. Ultimate beneficial ownership details are filed and regularly updated with the registrar under the broader Companies Act framework.

One of the most practical and far-reaching reforms is the SECP's fully digital one-window registration platform, eZfile. It integrates services from the Federal Board of Revenue, for instance, National Tax Number issuance, the Employees' Old-Age Benefits Institution, provincial social security, labour, and excise departments in Punjab, Sindh, and Balochistan.

Identity verification is automated through NADRA CNIC checks and registered mobile number validation. Approved companies receive a single combined certificate covering federal and provincial requirements, along with fully electronic certificates and certified copies.

Since 2021, the Financial Institution portal has enabled banks to access records in real time, significantly reducing corporate bank account opening times. SECP has also connected its systems with the Small and Medium Enterprises Development Authority, Intellectual Property Organisation, Pakistan Single Window, Public Procurement Regulatory Authority, Financial Monitoring Unit, and numerous entities under the Pakistan Regulatory Modernisation Initiative.

The results are compelling: Pakistan now ranks sixth among 50 economies in the World Bank's 2024 Business Ready "Business Entry" indicator. SECP topped a World Bank-IFC survey of 65 federal regulators for digital government-to-business services.

Earlier reforms had already placed Pakistan among the top 10 global improvers in ease of doing business, achieving a 58-point improvement in the "Starting a Business" category.

Nearly all company incorporations are now conducted online, and new registrations have risen 51% since 2020, reaching 35,087 in 2024-25 – with 21,542 in the first half of calendar year 2025 alone. These comprehensive reforms have elevated Pakistan's international standing while creating a more transparent, efficient, and attractive environment for business and investment.