Creation of Audit Oversight Board: Cabinet panel approves sea-change amendments to SECP law
ISLAMABAD: The Cabinet Committee on Legislative Cases (CCLC) headed by the Minister for Law and Justice, has approved sea changes in SECP Act, 1997 for the creation of Audit Oversight Board (AOB) subject to vetting by the Law Ministry prior to submitting the summary before the Federal Cabinet, well informed sources told Business Recorder.
Sharing the details, sources said Finance Division apprised the CCLC on December 3, 2025 that the Securities and Exchange Commission of Pakistan (SECP) Act, 1997, was amended through SECP (Amendment) Act, 2016 (XXXVI of 2016), dated 6th August, 2016, to insert Part IX-C for the creation of Audit Oversight Board (AOB).
AOB was an independent audit oversight board established by the parliament to function in the public interest and enhance the quality of audit of financial statements of public interest entities.
The Finance Division further apprised the CCLC that the AOB had proposed amendments in Part IX-C of Securities and Exchange Commission of Pakistan Act, 1997.
The objective of proposed amendments was to provide AOB with the required operational autonomy to ensure regulatory compliance, strengthen audit oversight, improve transparency and accountability in audit practices, while aligning it with international standards.
The CCLC was apprised that the SECP Policy Board in its meeting held on May 27, 2025 had endorsed the proposed amendments to Part IX-C. In-principle approval of the Cabinet was also obtained on the proposed amendments vide Cabinet’s decision on September 17, 2025.
The Finance Division informed the CCLC that the Ministry of Law and Justice had vetted the draft bill for amendments and the changes made by the said Ministry had also been were incorporated in the proposed bill. A certificate in this regard along with vetted draft Bill for amendments to Part IX-C of Securities and Exchange Commission of Pakistan Act, 1997, relating to AOB, comparative matrix and the statement of objects and reasons were also shared.
In view of the foregoing, it was proposed that the draft bill for amendments to Part IX-C of Securities and Exchange Commission of Pakistan Act, 1997, relating to AOB may be approved by the Cabinet Committee on Legislative Cases in terms of Rule 17(2) of the Rules of Business, 1973.
During the ensuing discussion, SECP explained the significance of AOB in response to the query of balancing the interests of the stakeholders. The CCLC noted that since these amendments propose to bring a sea change in the existing audit paradigm, therefore, all the stakeholders should be consulted regarding the said amendments. SECP explained that all relevant stakeholders were consulted, and the matter was discussed at Prime Minister Office level where all the stakeholders were duly represented. It was also explained that these amendments are being proposed to bring the existing audit mechanism at par with the international standards.
The CCLC examined the draft Bill in detail and proposed several amendments with the direction to the Finance Division/SECP and Ministry of Law and Justice to incorporate the same in the draft Bill before the case is placed before the Cabinet for approval.
Copyright Business Recorder, 2025