SECP and BOI Plan to Decriminalize Corporate Offences to Attract Investment

The Securities and Exchange Commission of Pakistan (SECP) and the Board of Investment (BoI) have proposed significant amendments to the Companies Act, 2017 aimed at reducing the regulatory burden on businesses and improving the ease of doing business in Pakistan. The reforms focus on streamlining compliance processes, promoting corporatisation, and aligning corporate regulations with global best practices.

A key aspect of the amendments is the decriminalisation of certain provisions, replacing penal sanctions with regulatory remedies and pecuniary penalties. This approach is intended to increase business confidence, encourage compliance, and modernize Pakistan’s corporate framework.

The SECP and BoI formed a committee to review the Act and recommend changes based on international standards, stakeholder feedback, operational challenges, and the SECP’s digitalisation initiative, Leading Efficiency through Automation Prowess (LEAP). The proposed changes aim to reduce administrative burdens, eliminate redundancies, and enhance efficiency in corporate regulation.

The reforms emphasize transparency in internal company processes, clearer responsibilities and accountability for key officials, and faster enforcement mechanisms. They also promote digitalisation by encouraging electronic filing and record-keeping, remote participation in meetings, and stronger digital systems for accounting, data management, and data protection.

Corporate governance will be strengthened through the adoption of globally recognised standards, with proportional application of financial audits and reporting obligations based on company size. By reducing unnecessary hurdles, the amendments aim to foster entrepreneurship, innovation, and a business-friendly environment while maintaining robust oversight and trust in the corporate ecosystem.

Overall, these changes are designed to make Pakistan’s corporate regulatory framework growth-oriented, competitive, and aligned with international best practices, supporting the development of a dynamic and transparent business environment.