The Securities and Exchange Commission of Pakistan

(SECP) was set up in pursuance of the Securities and Exchange

Commission of Pakistan Act, 1997. This Act institutionalized certain
policy decisions relating to the constitution and structure, powers, and
functions of the SECP, thereby giving it administrative authority and
financial independence in carrying out its regulatory and statutory
responsibilities. The SECP became operational in January 1999 and has
come a long way since then. It was initially concerned with the
regulation of corporate sector and capital market. Over time, its
mandate has expanded to include supervision and regulation of
insurance companies, non-banking finance companies and private
pensions. The SECP has also been entrusted with oversight of various
external service providers to the corporate and financial sectors,
including chartered accountants, credit rating agencies, corporate
secretaries, brokers, surveyors etc. The challenge for the SECP has
amplified manifold with its increased mandate.

Vision
The development of modern and efficient corporate sector and capital
market, based on sound regulatory principles, that provide impetus for
high economic growth and foster social harmony in the Country.

Mission
To develop a fair, efficient and transparent regulatory framework,
based on international legal standards and best practices, for the
protection of investors and mitigation of systemic risk aimed at
fostering growth of a robust corporate sector and broad based capital
market in Pakistan.

Strategy
To develop an efficient and dynamic regulatory body that fosters
principles of good governance in the corporate sector, ensures proper
risk management procedures in the capital market, and protects
investors through responsive policy measures and effective
enforcement practices.

Corporate Laws Review

The Companies Ordinance was promulgated in 1984 with the objective
of achieving healthy growth of corporate enterprises, providing
protection to investors and creditors, promoting investment and the
development of the economy. In the twenty one years since the law
came into force, the Pakistani economy, particularly the corporate
sector, has witnessed considerable growth and expansion. The
Companies Ordinance has been amended from time to time to cater to
the needs of an ever expanding sector. There is however, an urgent
need to carry out a holistic examination of the Companies Ordinance in
order to assess the relevance of its objectives in the current economic
scenario, the adequacy of its provisions and its capacity to allow for
balanced growth of corporate enterprises and the extent of its
harmonization with international best practices.

To undertake this essential exercise, the Securities & Exchange

Commission of Pakistan (SECP) has established the Corporate Laws
Review Commission (CLRC) under the able leadership and guidance of
Chief Justice of Pakistan (Retd.) Ajmal Mian, and comprising of
eminent members of the legal, accountancy and business community.

Introduction
• The Securities and Exchange Commission of Pakistan ("the
SECP") regulates the corporate sector in Pakistan in exercise of
its powers under the Securities and Exchange Commission of
Pakistan Act, 1997 and the Companies Ordinance, 1984 ("the
Companies Ordinance").
• The Companies Ordinance was promulgated in 1984 with the
objective of achieving healthy growth of corporate enterprises,
providing protection to investors and creditors, promoting
investment and the development of the economy.
• In the twenty one years since the law came into force, the
Pakistani economy, particularly the corporate sector, has
witnessed considerable growth and expansion. Two significant
developments in this regard are the inclusion of the non-banking
finance companies within the regulatory framework of the
Companies Ordinance and the introduction of single member
companies. The Companies Ordinance has been amended from
time to time to cater to the needs of an ever expanding sector.
• There is however, an urgent need to carry out a holistic
examination of the Companies Ordinance in order to assess the
relevance of its objectives in the current economic scenario; the
adequacy of its provisions, not only for the achievement of its
avowed objectives, but for the creation and maintenance of a
liberal, deregulated and efficient corporate sector; its capacity to
allow for balanced growth of corporate enterprises and the
extent of its harmonization with international best practices. In
 the event that the Companies Ordinance is found lacking in any
of these crucial areas, and the gap cannot be plugged by
suggesting amendments, there may be a need to redraft the
law.
• To undertake this essential exercise, the SECP hereby
establishes the Corporate Laws Review Commission ("CLRC")
under the able leadership and guidance of Chief Justice of
Pakistan (Retd.) Ajmal Mian and comprising, inter alia, eminent
members of the legal and business community, listed in
Schedule A hereto, to examine, assess and redraft the
Companies Ordinance in accordance with these terms of
reference.

The objectives of the CLRC

• Assess the adequacy of the Companies Ordinance vis a vis its stated objectives and for the development
and maintenance of a liberal, deregulated, efficient and cost effective corporate sector.
• Examine the objectives, the structure and content of the Companies Ordinance to prepare a conceptual
framework for revisions to or redrafting the Companies Ordinance.
• Draft the amendments to the Companies Ordinance or redraft the law, as may be necessary.
• Review the structure and contents of amendments or the redrafted law.
• Ensure that the amendments or the drafted law is in line with governmental policies; creates an
enabling regulatory framework for enhanced corporatization, the balanced growth of the corporate
sector and strikes an appropriate balance between indigenous conditions and international best
practices.

scope of work
The CLRC shall undertake all work necessary to achieve the aforesaid objectives, including, but not limited to:

• Examining the Companies Ordinance to assess its adequacy vis a vis its objectives and for the enhanced
corporatization, good corporate governance, transparent and efficient financial reporting and the
balanced growth of the corporate sector;
• Recommending necessary measures, e.g. amendments to the Companies Ordinance or redrafting the
law, for the creation of a modern, efficient, liberal and flexible enabling regulatory framework for
nurturing balanced corporate growth in Pakistan;
• Providing a detailed conceptual framework for the proposed amendments or the redrafting of the law;
• Ensuring that the provisions of the Companies Ordinance are consistent with other laws in Pakistan;
• Ensuring that the amendments or the redrafted law strikes an appropriate balance between
governmental policies and national factors on the one hand and harmonization with emerging market
norms and international best practices on the other.

Execution of the Work

• The CLRC is an independent body of experts and shall conduct its affairs in accordance with the
procedures agreed upon by the members.
 • In seeking to attain the objectives stated herein, the CLRC shall carry out the work as detailed in Part C
above, as well as any additional work it deems necessary to achieve these objectives.
• The CLRC may co-opt such members or form such sub committees as it may deem necessary in order
to meet its objectives.

Deliverables
The CLRC shall prepare the following deliverables:

• A concept paper for the development and regulation of the corporate sector.
• An interim progress report along with a preliminary draft of the amendments or the redrafted law, as
the case may be.
• A draft bill containing the text of the amendments (as well as a version of the Ordinance, with the
amended portions inserted) or the redrafted law as the case may be.
• A statement providing the objects of and reasons for the amendments or the redrafted law, including
detailed rationale and justification for the amendments or redrafted law.
• A brief report indicating the areas in which regulations are required to be drafted and the likely scope of
such regulations.

Support
SECP will provide all necessary logistical support to the members of the CLRC including but not limited to travel
to and accommodation in the place where the meeting of the CLRC is to be held, meeting rooms, office space,
secretarial support and related facilities, engagement of consultants, advisers and experts.