SECP proposes reforms to allow partnerships, AoPs, LLPs to list on stock market

The Securities and Exchange Commission of Pakistan on Wednesday proposed changes to the Public Offering Regulations, 2017, aimed at expanding capital market access for businesses operating as partnerships, Associations of Persons (AoPs) and Limited Liability Partnerships (LLPs).

Under the proposal, entities converting into companies would be permitted to use their pre-conversion financial and operational track record when applying for a public listing, subject to certain conditions. This marks a shift from the current framework, which requires companies to demonstrate at least two profitable financial years before making a public offer.

To safeguard investors, SECP stated that historical financial statements must comply with the same accounting and disclosure standards applicable to companies. They must also be audited by firms with a Quality Control Review rating.

The regulator said the amendments are designed to lower barriers for established businesses seeking to raise capital, while encouraging partnership-based enterprises to adopt a corporate structure and enter formal capital markets.

SECP added that these reforms are expected to broaden the issuer base, strengthen investor confidence and support long-term economic growth in Pakistan.