SECP’s Reforms in Corporate Governance — Pakistan (2025 Guide)

A concise, practical guide for company directors, in-house counsel, auditors and compliance officers explaining recent SECP reforms (codes, SRO amendments, enforcement trends) and what businesses must do to comply in 2025.

Quick snapshot

Since 2023 the Securities & Exchange Commission of Pakistan (SECP) has actively updated corporate governance rules for listed and other regulated companies — focusing on board accountability, diversity, anti-harassment, sustainability disclosures, stronger enforcement and modernised Companies Regulations. SECP also continues to run regulatory sandboxes to support innovation while keeping governance standards in focus. 0

What changed recently (high-level)

• Listed Companies Code updates: The Listed Companies (Code of Corporate Governance) Regulations, 2019 have been amended through 2023–2025 and consolidated versions were published (amendments include governance enhancements and procedural clarifications). 1
• Diversity, anti-harassment & sustainability: S.R.O. notifications in 2024 introduced amendments requiring attention to diversity, anti-harassment frameworks and sustainability-related reporting enhancements for listed companies. 2
• Companies Regulations & enforcement tools: SECP issued Companies Regulations (2024) and further amendments (S.R.O. 459 of 2025) modernising procedural rules, filings and corporate records. Enforcement orders under the listed-companies code show active regulatory oversight in 2024–2025. 3
• Regulatory sandbox & innovation focus: SECP continues to operate and expand its regulatory sandbox cohorts for fintech and corporate services, balancing innovation with governance safeguards. 4

Why these reforms matter

• Investor confidence: clearer governance standards reduce information asymmetry and improve investor trust.
• Access to capital: compliance with SECP codes is increasingly a precondition for institutional investment and cross-border listings.
• Risk management: anti-harassment, diversity and sustainability measures reduce operational, reputational and litigation risks.
• Accountability: enhanced enforcement signals SECP’s focus on making governance rules effective, not merely advisory. 5

Key pillars of the updated governance regime

1. Board composition & independence — stricter tests for independent directors, clearer role definitions for Chair/CEO separation, and quorum/meeting requirements.
2. Audit & risk governance — strengthened audit committee charters, internal controls, external auditor rotation and reporting lines for risk management.
3. Corporate reporting & disclosures — obligations for timely financial disclosures, related-party transaction reporting and enhanced ESG-related disclosures where relevant.
4. Stakeholder & minority protection — improved procedures for related-party approvals, minority shareholder protections and fair treatment in major transactions.
5. Workplace conduct & diversity — required anti-harassment policies, complaint mechanisms, and board-level attention to diversity and inclusion. 6

Enforcement trends — what SECP is doing

Enforcement activity under the listed companies code increased in 2024–2025 with show-cause notices and orders issued to several firms for governance lapses, disclosure failures and breaches of regulatory obligations. SECP is publishing orders and using compliance directions, fines and corrective measures to enforce standards. Companies should treat SECP guidance as both prescriptive and actively policed. 7

Practical compliance checklist for companies (ready-to-use)

1. Regulatory housekeeping: Ensure your company follows the latest Listed Companies Code / Companies Regulations — download consolidated texts from SECP and track SRO updates. 8
2. Board policies: Adopt/update board charter, director appointment procedures, independence criteria and conflict-of-interest rules.
3. Audit & risk: Review audit committee terms, ensure timely internal audits and implement an enterprise-wide risk register.
4. Anti-harassment & HR policies: Implement a written anti-harassment policy, an impartial complaint mechanism, and staff training. 9
5. Disclosure & ESG: Prepare to report sustainability indicators and update disclosure templates for material events and related-party transactions.
6. Whistleblower & ethics: Create secure whistleblower channels and protect complainants against retaliation.
7. Training & documentation: Maintain minutes, director appointments, board evaluations and evidence of compliance actions for SECP inspections.
8. Engage advisors: Use corporate counsel and external auditors to review compliance gaps and remediate promptly.

What directors and auditors should watch for

• Personal liability risk where directors fail to supervise or implement required governance measures.
• Audit independence concerns — rotate auditors and resolve conflicts proactively.
• Timely disclosure obligations — material events must be reported as required by the code.
• Board evaluation and documented reasons for independence designations — be prepared to justify selections during inspections.

Opportunities created by the reforms

• Better governance attracts institutional capital, including ESG-minded investors.
• Clearer rules reduce transaction friction for mergers, acquisitions and cross-border deals.
• Companies with strong governance can use SECP sandbox pathways for corporate-fintech innovations. 10

How to prepare for a SECP inspection or inquiry

1. Maintain an up-to-date compliance folder with board minutes, charters, policies, audit committee reports and disclosure filings.
2. Compile a timeline of material events and related-party approvals for the review period.
3. Document remedial steps taken for any past non-compliance and evidence of staff training.
4. Designate a single SECP liaison in the company to handle communications and information requests promptly.

Practical note: Treat SECP’s consolidated regulations (e.g., Listed Companies Code up to March 20, 2025) as the operative guidance — save local copies and track S.R.O. notifications (e.g., S.R.O. 920(I)/2024 on diversity & anti-harassment; S.R.O. 459/2025 on Companies Regulations amendments). 11

Useful SECP links & official resources

• SECP — Listed Companies (Code of Corporate Governance) Regulations (consolidated, amended to March 20, 2025). 12
• SECP — Corporate Governance main page (frameworks for listed, public sector and insurance companies). 13
• S.R.O. 920(I)/2024 — Amendments regarding anti-harassment, sustainability & diversity. 14
• SECP — Regulatory Sandbox program & cohort announcements. 15
• SECP — recent enforcement orders and show-cause decisions under the listed companies code (2024–2025). 16

Disclaimer: This guide summarises publicly available SECP materials and practical compliance steps for 2025. It is informational only and not legal advice. For company-specific compliance, regulatory filings or representation before SECP consult a qualified corporate lawyer or compliance advisor.

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