ISLAMABAD: In a major step towards strengthening Pakistan’s capital markets and expanding long-term financing opportunities for businesses, the Securities and Exchange Commission of Pakistan (SECP) has constituted a high-level Working Group to undertake a comprehensive review of the country’s corporate debt market and recommend regulatory, legal, and policy reforms aimed at developing a vibrant, efficient and investor-friendly debt market.
The initiative has been launched on the guidance of Federal Minister for Finance, who identified the development of a robust corporate debt market as a national strategic priority. The Minister emphasised the need for Pakistan to move towards a more balanced financial system by reducing excessive dependence on conventional bank lending and creating diversified long-term financing avenues through capital markets.
A well-developed corporate debt market is essential for mobilising long-term capital, financing infrastructure and industrial projects, diversifying funding sources for businesses, and broadening investment opportunities for institutional and retail investors.
The initiative also seeks to improve financial market resilience by enabling companies to raise funds directly from capital markets through debt securities.
The Working Group will be chaired by SECP Commissioner Muhammad Ali Farid Khawaja and comprises senior representatives from the Ministry of Finance, Pakistan Stock Exchange (PSX), Central Depository Company (CDC), Infra Zamin Pakistan, leading investment banks and brokerage houses, commercial banks, credit rating agencies, legal experts, and other market participants. The broad-based composition is intended to ensure practical, market-driven recommendations for comprehensive reforms.
The Working Group has been assigned an extensive mandate to identify structural bottlenecks and recommend reforms across the corporate debt ecosystem.
The Group will review the existing credit rating framework to improve efficiency, transparency and investor confidence. It will assess the impact of current rating requirements on issuance timelines, transaction costs and market accessibility, while also recommending measures to simplify rating processes and encourage innovation in rating products.
A comprehensive end-to-end review will be undertaken for both privately placed and publicly offered corporate debt securities.
The Working Group will examine the time required at each stage of the issuance process and identify regulatory, legal and operational bottlenecks.
It will also evaluate the complete cost of issuing corporate debt including regulatory fees, professional charges, listing expenses, taxation and other transaction costs—and recommend measures to rationalize these expenses.
In addition, the Group will review legal and documentation requirements, propose standardized documentation, recommend amendments to the regulatory framework where necessary, and benchmark Pakistan’s practices against international best standards to improve efficiency and reduce issuance timelines.
Recognising the significant potential of Islamic finance, the Working Group will also review the regulatory and Shariah framework governing Sukuk issuances. It will identify legal, Shariah and operational impediments that contribute to higher issuance costs and longer transaction timelines, and recommend reforms to facilitate standardised Sukuk structures, improve market efficiency and support the expansion of Pakistan’s Islamic corporate debt market.
The Working Group has also been authorised to co-opt additional experts and institutions whenever required to support its work. It has been tasked to submit its report and recommendations within 45 days of its constitution.
The recommendations of the Working Group will serve as the foundation for future regulatory and policy reforms aimed at strengthening Pakistan’s corporate debt market, improving market efficiency, lowering the cost and complexity of debt issuances, attracting greater institutional investment, and expanding businesses’ access to long-term capital.
Chairman SECP Dr Kabir Ahmed Sidhu said, “Deepening Pakistan’s corporate debt market is a strategic priority. A stronger debt market will broaden long-term financing avenues for companies, attract institutional investment, and support infrastructure and industrial development. Through this collaborative initiative, SECP aims to build a modern, efficient and globally competitive debt market that contributes to sustainable economic growth and strengthens Pakistan’s overall financial ecosystem.”
Copyright Business Recorder, 2026
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