ISLAMABAD:

The Securities and Exchange Commission of Pakistan (SECP) has proposed amendments to the Public Offering Regulations, 2017, to unlock access to capital markets for companies that previously operated as Associations of Persons (AoPs), partnership ventures and Limited Liability Partnerships (LLPs).

“This will reduce entry barriers and help established businesses raise capital for expansion. It will also support the development of Pakistan’s capital markets,” said the SECP in a statement on Wednesday. “Under the proposal, AoPs, partnerships and LLPs will be able to use their historical business track record while seeking listing as a company.”

Under the existing framework, a company must show a profitable operating record for at least two preceding financial years before making a public offer of securities. The proposed amendments will allow businesses that convert into a company to rely on their financial and operational records from the period when they operated as a partnership entity, subject to certain conditions.

To protect investors and ensure transparency, the financial statements of such entities must comply with the accounting and disclosure requirements applicable to companies. These financial statements must also be audited by a Quality Control Review-rated audit firm.

The proposed changes will encourage partnership-based businesses to adopt the corporate structure and enter the formal capital market framework. The proposal is expected to broaden the issuer base, strengthen investor confidence and support long-term economic growth.

According to the SECP, the draft amendments to the Public Offering Regulations, 2017 have been placed on the commission’s website for public consultation. It has invited stakeholders, market participants and the general public to submit their feedback.