ISLAMABAD – The Securities and Exchange Commission of Pakistan (SECP) has proposed a bold new framework to transform industry associations into Self-Regulatory Organizations (SROs) to strengthen the country’s financial sector.
The SECP unveiled a Consultation Paper that introduces a set of standard principles for the recognition and conduct of industry associations. The goal is to improve self-regulation, promote transparency, and align with global best practices in financial governance.
Under the proposed plan, eligible trade associations will be required to convert into Section 42 companies under the Companies Act, 2017, operating as not-for-profit entities. This shift will ensure better governance, financial integrity, and accountability across various sectors.
Moreover, the SECP suggests that these associations adopt key responsibilities such as setting ethical standards, monitoring member conduct, enforcing compliance, and leading sector-specific initiatives. This transformation is expected to take place over the next three years.
The framework also encourages the creation of specialized associations for each sub-sector within regulated industries. These bodies will address unique operational and compliance challenges more effectively, fostering a tailored approach to regulation.
With this initiative, the SECP aims to build a transparent, trustworthy, and competitive financial ecosystem. The Commission believes empowering industry associations will help raise investor confidence and drive long-term, sustainable economic growth.