Finance minister meets new SECP leadership, discusses capital market reforms

Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb on Monday held a meeting with the new leadership of the Securities and Exchange Commission of Pakistan (SECP) at the Finance Division to discuss priorities for capital market development and regulatory coordination.

The meeting was attended by SECP Chairman Kabir Ahmed Sidhu and Commissioner Ali Farid Khawaja, along with senior officials from the Finance Division responsible for debt management, capital markets and regulatory coordination.

Welcoming the new SECP leadership, the finance minister expressed confidence that their domestic and international market experience would help strengthen Pakistan’s regulatory framework and support the development of capital markets. Discussions focused on aligning priorities to deepen capital markets, diversify financing sources for the public and private sectors, and improve investor confidence through efficient regulation, modern market infrastructure and coordinated policy action.

The minister highlighted the government’s integrated reform approach under the Capital Markets Development Council, with finalized terms of reference aimed at shifting from institution-specific reforms to a system-wide market development agenda. He said the objective was to build on progress achieved across market institutions while addressing gaps requiring regulatory reform, legislative support and inter-agency coordination.

Development of the debt capital market was a central theme of the meeting, with emphasis on reducing reliance on banks as the primary source of financing. The finance minister stressed the need to broaden participation by insurance companies, asset managers, pension funds and retail investors, in line with asset-liability management practices.

The Finance Division shared updates on efforts to strengthen domestic debt management through improved front, middle and back office functions and liability management operations, noting that further progress would require close collaboration with SECP to expand market depth and efficiency.

Participants identified high intermediation and transaction costs as a key constraint, noting that multiple layers between issuers and investors add cost and delay. The meeting agreed on the need to streamline market architecture, improve issuance processes and strengthen secondary market functioning.

Investor onboarding and market access were discussed as critical to improving liquidity. The meeting reviewed proposals for faster digital account opening, risk-based KYC, and consent-based portability of KYC across financial institutions, with a focus on bringing retail investors from informal channels into the formal capital market.

The SECP leadership shared initial observations on regulatory frameworks for non-bank financial companies, SME-focused finance and insurance, highlighting the need to revisit these frameworks to support access to finance while maintaining prudential oversight.

On the equity side, participants welcomed signs of improving IPO activity and discussed measures to broaden participation in equity market transactions. The finance minister underscored the importance of expanding the pool of institutions supporting capital raising and ensuring market infrastructure can handle higher issuance volumes.

Alternative investment vehicles, including private equity and venture capital, were discussed as channels to mobilize private capital for infrastructure and priority sectors. The meeting also reviewed policy and tax issues affecting fund formation and long-term investment.

The role of public capital markets in the government’s privatization agenda was discussed, with participants noting that listings and market-based price discovery could complement strategic transactions by improving valuation transparency and corporate governance.

Emerging areas such as digital assets and tokenization were discussed in an exploratory context. The Finance Division briefed participants on early-stage work on potential tokenization of government debt, while stressing that investor demand, regulation and institutional capacity remain prerequisites.

The finance minister reaffirmed the government’s commitment to close coordination with SECP on a time-bound reform agenda focused on market deepening, investor expansion, lower transaction costs and faster approvals. The SECP leadership pledged to work with the Finance Division and market stakeholders to translate these priorities into measurable reforms.