Aurangzeb confident market expertise to strengthen regulation, boost capital markets
ISLAMABAD: Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb on Friday held a meeting with the new leadership of the Securities and Exchange Commission of Pakistan (SECP), led by Chairman Kabir Ahmed Sidhu and Commissioner Ali Farid Khawaja, who called on the Finance Minister.
The Finance Minister’s core team at the Finance Division, including senior officers overseeing debt management, capital market development, and regulatory coordination, was also in attendance. Welcoming the new SECP leadership, the Finance Minister expressed confidence that their extensive domestic and international market experience would strengthen Pakistan’s regulatory framework and accelerate the development of capital markets, said a press release.
The meeting 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 infrastructure, and coordinated policy action. The Finance Minister highlighted the Government’s move toward a more integrated reform approach through the Capital Markets Development Council, with finalized terms of reference aimed at shifting from institution-specific silos to a horizontal, system-wide market development agenda. The objective, he noted, is to leverage progress already achieved across various market institutions while addressing gaps that require regulatory reform, legislative support, and inter-agency coordination.
A major focus of the discussion was the development of Pakistan’s debt capital markets. The Finance Minister emphasized the need to reduce reliance on banks as the primary source of financing and to broaden participation by insurance companies, asset managers, pension funds, and retail investors, in line with sound asset-liability management practices. The Finance Division shared ongoing work to strengthen domestic debt management through improved front, middle, and back office functions and liability management operations, noting that the next phase requires close collaboration with SECP to expand market depth and efficiency.
Participants identified the reduction of friction and intermediation costs as a key priority. It was noted that multiple layers in the issuance-to-investor chain add cost and delay, limiting the effectiveness of debt capital markets. The meeting agreed that streamlining market architecture, improving issuance processes, and enhancing secondary market functioning are essential to better connect borrowers with investors and support sustainable market growth. Investor onboarding and market access were discussed as critical enablers of liquidity and participation. The meeting reviewed the need for faster, genuinely digital account opening processes, risk-based KYC, and consent-based portability of KYC across financial institutions. Improving ease of entry for retail investors was identified as a priority, particularly to channel participation from informal or unregulated investment avenues into the formal capital market. The SECP leadership shared initial observations on regulatory frameworks for NBFCs, SME-focused finance, and insurance, noting the need to revisit and strengthen these frameworks to support access to finance while maintaining prudential oversight. The discussion emphasized a regulatory approach that enables business activity, reduces unnecessary procedural delays, and promotes compliance through digital tools. On the equity market side, the meeting welcomed signs of improving IPO activity and discussed measures to broaden participation in equity capital market transactions.
The Finance Minister underscored the importance of expanding the pool of institutions able to support capital raising activity, enhancing competition, and ensuring that market infrastructure has adequate capacity to process increased issuance without bottlenecks. Staff Report
