Key Points
- Over 2,000 SECP-related cases pending in courts delay enforcement actions
- Proposal to establish dedicated tribunals for faster adjudication
- Consideration of civil penalty-based enforcement framework
- Digitisation drive to reduce fraud risk and improve market transparency
ISLAMABAD: Pakistan has launched a reform initiative aimed at strengthening market regulation, improving enforcement efficiency and restoring investor confidence, as authorities confront a litigation backlog involving the country’s corporate regulator.
The regulatory reform process would strengthen the Securities and Exchange Commission of Pakistan (SECP), with a government committee reviewing measures to address enforcement delays, legal bottlenecks and structural weaknesses in the country’s capital market oversight system.
The Prime Minister’s Committee on strengthening SECP, chaired by Federal Minister for Law and Justice Azam Nazeer Tarar, assessed ongoing challenges in regulatory enforcement.
The meeting’s particular focus was on the large volume of pending litigation affecting the recovery of penalties and timely action against violations.
Officials said more than 2,000 SECP-related cases are currently pending before courts, creating significant delays in enforcement proceedings and weakening the regulator’s deterrent capacity in financial and corporate markets.
SECP Chairman Dr Kabir Ahmed Sidhu briefed the committee on proposed structural reforms, including the establishment of dedicated tribunals to accelerate adjudication of regulatory cases and reduce reliance on the conventional court system.
He also proposed a shift toward a civil enforcement regime for market-related violations.
This would align Pakistan’s regulatory framework with international practices that prioritise financial penalties and administrative action over criminal proceedings.
The committee noted that enforcement inefficiencies are driven not only by judicial backlog but also by procedural constraints within the regulatory system.
The situation requires broader institutional strengthening alongside legal reform.
Digitisation of regulatory processes was identified as a key reform priority, aimed at reducing human intervention, improving transparency and limiting opportunities for fraud.
Officials highlighted ongoing transition measures, including the expansion of book-entry securities through the Central Depository System to reduce paper-based risks and improve traceability in capital market transactions.
The committee also discussed legislative options to strengthen SECP’s enforcement powers, including decriminalisation of selected offences to enable more effective application of civil penalties.
The committee directed SECP to present a comprehensive reform roadmap at its next meeting, including proposals on tribunal structures, recovery mechanisms, legal amendments and institutional efficiency measures.
