The Securities and Exchange Commission of Pakistan (SECP) has put forward amendments to the Public Offering Regulations, 2017, aimed at enabling businesses operating as Associations of Persons (AoPs), partnerships, and Limited Liability Partnerships (LLPs) to access Pakistan’s capital markets, according to a statement issued on Wednesday.
The regulator said the proposed changes are designed to lower entry barriers and allow well-established businesses to raise funds for expansion, while also contributing to the growth of the country’s capital markets.
Under the new proposal, AoPs, partnerships, and LLPs would be allowed to use their historical business performance when applying for listing as a company.
Currently, companies are required to demonstrate profitability for at least two consecutive financial years before launching a public offering. The proposed revisions would permit businesses transitioning into corporate entities to rely on their financial and operational track record from when they operated as partnerships, subject to certain conditions.
To safeguard investors and maintain transparency, SECP stated that such entities must ensure their financial statements meet applicable accounting and disclosure standards for companies. These records must also be audited by a Quality Control Review-rated audit firm.
The commission noted that the changes are expected to encourage more partnership-based businesses to shift to a corporate structure and participate in formal capital markets. This, in turn, would expand the pool of issuers, enhance investor confidence, and support sustainable economic growth.
