About SECP
      Company Law Division
      Securities Market Division
  Specialized Companies Division
Home (Urdu)
Circulars/Directives/Notifications/ Clarifications
Laws Administered
Development Activities
Licensed Entities
Registered Funds
Trade Associations/Useful Links
International Memberships
Modaraba Creation
Monthly Sector Summary
Contact Persons
Laws and Policies
Statutory Forms
Guide Series
Investor Education
Memorandum & Articles of Association
Schedule of Fee
Online Services
Company Name Search
Fee Calculators
Company Incorporation
Authorized Share Capital
Regulation Directives
Press Releases
Appellate Bench Orders
Corporate Warnings
Public Warnings
Public Notices
Draft Amendments
      Insurance Division
Specialized Companies Division


Specialized Companies Division:
a. Policy, Regulation and Development Department

PRDD comprises of the following wings:

  1. Asset Management Companies Wing
  2. NBFC’s, Litigation and Advisory Wing
  3. REIT, Pension and Private Equity Wing
  4. Modarba Wing

b. Supervision and Enforcement Department:

Supervision and Enforcement Department has been sub-divided into following wings:

  1. Off-site Surveillance Wing
  2. On-site Inspection Wing
  3. Enforcement Wing

The Asset Management Companies wing is entrusted with the responsibility for licensing, registering and regulating Non-Banking Finance Companies (NBFCs) engaged in asset management and investment advisory services. This includes regulating Open-end and Closed-end funds along with handling investors’ complaints. The wing is active in identifying and implementing policy and reform initiatives. In doing so, the Asset Management Companies wing develops and maintains constructive and harmonious relationships with market participants. For more information about formation of an asset management company or investment advisor, click here.
The wing is responsible for licensing and regulation of non-banking finance companies (NBFCs) conducting the business of investment finance services, leasing and housing finance services. For more information about incorporation of an NBFC or to provide investment finance services, leasing and housing finance services click here.
REIT’s, Pension and Private Equity Wing

The REITs Pension and Private Equity Wing is responsible for licensing, registration and regulation of: (1) REIT Management Companies and REIT Schemes and (2) registration and regulation of pension fund managers and private pension schemes and (3) Private Equity and Venture Capital Fund Management Companies and Private Equity and Venture Capital Funds in Pakistan including the entities previously licenced as venture capital companies.

REITs is an alternative asset class which will add depth to the capital market and provide transparency to the real estate sector in the form of comprehensive disclosures and accountability through a trust mechanism engrained in the REIT Regulations. REITs will provide an additional product choice to retail investors and added flexibility to investment managers.

Information related to REITs is available at following links:

  1. RMC Formation Guidelines
  2. REIT Regulations, 2015

Private Equity is also an alternative asset class and the SECP has promulgated a Regulatory Framework for the Private Equity and Venture Capital Funds in Pakistan. The Regulations have been developed in light of the international practices and recommendations by the participants of both local and international financial markets. The PE&VC Fund is an unlisted closed-end trust open only to high net-worth individuals and institutions due to its intrinsic nature of being a high-risk asset class. The PE&VC Fund aims to provide equity for seed/start-up capital, expansion and buy-out financing primarily to private companies.

Information related to PE&VC Funds is available at following links:

The private pension funds are regulated through Voluntary Pension System Rules, 2005. The Voluntary Pension System provides a comprehensive framework for the employed and self-employed individuals to contribute into the pension funds. Pakistani nationals holding National Tax Number (NTN) or Computerized National Identity Card (CNIC) or National Identity Card for Overseas Pakistanis (NICOP) can become participants of a pension fund and avail tax credit as specified in the tax laws. Individuals contributing to the pension fund have the flexibility to choose between various investment options as well as between various fund managers.

For more information about registration as Pension Fund Manager please, click here.
Modaraba Wing

Modaraba is one of the prime modes of Islamic Financial System. In Pakistan the process of Islamization of the economy was initiated in 1980 when the Government introduced the concept of Modaraba for Islamization of the economy in the banking and corporate sector by promulgating the Modaraba Companies & Modaraba (Floatation & Control) Ordinance, 1980 and Modaraba Companies and Modarabas Rues 1981. Amongst other activities, the law provides that a Modaraba can undertake Ijara, Morabaha, Musharaka financing activities, trading of Halal Commodities, project financing activities, investment in the stock market and can act as a special purpose vehicle and a venture capital company.

The Modaraba Wing is responsible for the registration, authorization, regulation and enforcement of regulatory provisions pertaining to Modaraba Management Companies and Modarabas. All the products and business activities of the Modaraba are approved by the Religious Board* with the facilitation of the Modaraba Wing. For further information regarding Registration and formation of a Modaraba Company and Modaraba, click here.

* The Religious Board
The Religious Board comprises of a Chairman and two Shariah Scholars appointed by the Federal Government. The following is the composition of the Religious Board constituted by the Federal Government  vide notification dated August 30, 2012:

  • Former Justice Syed Zahid Husain Bokhari (Chairman) ;
  • Mufti Muhammad Saeed Khan (Shariah Scholar); and
  • Dr. Muhammad Tahir Mansoori (Shariah Scholar).

The Religious Board has approved the ‘Twelve Model Islamic Financing Agreements’, click below to preview the Agreements:

Supervision Department

Offsite Surveillance Wing

Offsite Surveillance Wing (OSW) is conferred with the responsibility to keep continuous oversight on Non-Bank Financial Institutions (NBFCs), Notified Entities (NEs) and Islamic Financial Institutions (Modarabas) to assess their compliance with the relevant regulatory framework and to examine their financial health and performance. The above objectives are achieved through:

  • Compilation of NBFCs Sector report on monthly basis
  • Performing offsite review of the entity and issuing the review report
The sector report, containing key statistics of mutual funds, pension funds, investment advisory portfolios, leasing companies, investment banks and modarabas, is compiled on monthly basis. The sector report is shared with Enforcement Wing which may take necessary action(s) on instances of non-compliance & abrupt changes in financial performance / condition of the entity (ies) in question while a copy of the report is also shared with SCD-Policy, Regulation & Development Department, to take cognizance of the latest industry trends.

The wing performs offsite reviews of the entities under the risk based annual offsite review plan. Entities carrying higher risk (i.e. on the basis of their size, leverage, etc.) are reviewed every quarter while the entities with lesser risks, are reviewed semi-annually. Offsite examination is primarily conducted on the basis of the information filed monthly by the entities through Specialized Companies Returns System (SCRS), their periodic financial statements/reports and the other market information (if available). In order to ensure effective coverage in examination of entities, certain formats have been developed for calling information from entities. These formats are reviewed periodically to take effect of the changes made in the regulatory framework (if any) and knowledge gained through past experience of offsite examination. While performing offsite reviews, following key areas are examined:

  • Analysis of performance of mutual funds/collective investment schemes vis-à-vis their respective benchmarks and in some cases with the peers.
  • In-depth analysis of the portfolios of mutual funds including assessment of major risks i.e. risks arising from concentrated positions, liquidity risk, credit risk etc.
  • Composition of investors / unit holders (i.e. share of individuals, related parties, etc.)
  • Transactions with related parties/connected persons.
  • Composition of Board, Audit Committee, Senior Management & Other Committees in light of Fit & Proper Criteria and Code of Corporate Governance.
  • Examination of Classified Assets / non-earning assets and recoveries made there against
  • Analysis of overall leverage position including deposits & borrowings and liquidity, examination of profitability and assessment of capital adequacy of the entity
  • Violations of relevant regulatory framework.

The offsite review reports are shared with the Enforcement Wing & Registrar Modarabas, for necessary action(s) at their end. Further, Offsite Surveillance Wing also provides input in the development of onsite inspection plan and in other regulatory issues.

Apart from above, the wing also acquires information from entities and compiles them, from time to time, on the request of other departments/wings of the Commission as well as other regulatory and international organizations, hence the wing also serves as the information hub for Specialized Companies Division.


Onsite Inspection Wing

Onsite inspection wing (OIW) conducts onsite inspection of NBFCs including Mutual Funds and Modarabas and makes in-depth assessment of the entity with respect to its financial condition/performance, business practices, internal controls and corporate governance. The entities are selected for inspection on the basis of risk assessment, primarily carried out by offsite surveillance wing and the feedback from Enforcement Wing and the Policy, Regulation & Development Department.

After an inspection order is issued to an entity, the inspection team conducts pre-onsite work in order to determine focus areas and risks associated with the entity. During the course of inspection, the team obtains all relevant data/ information/documents and conduct various technical analysis. The inspection team also conducts meetings with relevant employees including the CEO, CFO, departmental heads, fund Managers, compliance officer, internal audit personnel, the external auditors and the trustee (where necessary) and make independent assessment/judgment.

The scope of onsite inspection includes but is not limited to the following:

  • Review of the Governance Structure of the entity including composition of the Board, Audit Committee, etc., in light of the Fit and Proper Criteria and Code of Corporate Governance.
  • Review of other internal controls of the entity including independence & effectiveness of internal audit function, research function, risk management and compliance function.
  • Detailed examination of performance and financial health of entity being inspected.
  • Assessment of investment decision making process for equities, fixed income securities, foreign investments etc.
  • Review of controls over financing activities including credit policies, credit risk assessment process, credit approval procedures, credit documentation (especially focusing on completeness/perfection of documentation for collaterals/mortgage) and disbursement mechanism.
  • Review of post disbursement/investment monitoring mechanism, procedure(s) for monitoring non-performing assets and recoveries made there against.
  • Determine quality of assets including investment in equities, fixed income securities, and other avenues, loans and leases and other assets of the entity
  • Determine underlying reasons of significant under/out performance of mutual funds under management of the entity vis-à-vis respective benchmarks.
  • Assessment of overall leverage, liquidity, profitability and capital adequacy of the entity
  • Review of the adequacy of the disclosures and Integrity of financial reporting to the stakeholders.
  • Detect instances (if any) of fraudulent practices including insider trading, front running, etc.
  • Violations of the applicable regulatory framework.

After completion of on-site inspection, all observations and violations are noted and shared with the management in the form of draft inspection report, along with all supporting documents, in order to seek their comments. The management of the entity is provided with an opportunity for providing written comments on the draft report and for a meeting with the inspection team to discuss the reported observations and violations and the management’s comments thereon. The inspection report is then finalized keeping in view the management’s response and then sent to the Enforcement Wing for taking appropriate corrective measures/enforcement actions.


Enforcement Wing

Enforcement wing (EW), is vested with the responsibility to take appropriate actions on violations committed by the regulated entities/ their directors/ officers/ auditors/ trustees etc. While executing its mandate, the Enforcement wing follows a two pronged strategy i.e. ‘prevention’ and ‘deterrence’. Instances of non-compliance and other observations forwarded by Offsite Surveillance and Onsite Inspection wings are independently assessed and if deemed necessary, suitable corrective actions are initiated proactively, besides taking appropriate enforcement actions. In addition, enforcement actions are also be initiated on the basis of monthly sector reports, investor/depositor complaints, and matters reported by the trustees.

Major activities being performed by the Enforcement Wing include;

  • Review of the reports forwarded by offsite surveillance and onsite inspection wings; obtain further details (if required) in relation to observations/ violations reported therein, check on previous instances of similar non-compliance and steps taken in the past by the relevant entity to regularize the shortcoming and take suitable enforcement action accordingly.
  • Enforcement actions may include issuing advice to non-compliant entity requiring it to explain its position and providing the company with an opportunity to regularize the breach (where allowed under the relevant rule/ regulation). In case non-compliance is not regularized within reasonable time frame, further enforcement action (issuance of Warning / Compliance Letters, Directions, etc.) is recommended.
  • Issue/assist in issuing show cause notices in case of violations/ irregularities; conduct/assist in conducting hearing proceedings and issue/assist in issuing orders.
  • Handle complaints received from investors/ depositors’ and other stakeholders etc.
  • In case of significant under performance by Collective investment scheme(s)/mutual fund(s), necessary explanations are called from the respective asset management companies. In some cases, the board of directors is also required to take corrective actions in order to improve the performance.
  • Monitoring the entities in financial and operational distress with respect to failure to meet minimum equity requirement, inability to settle financial obligations and facing continuous losses. Their managements/boards are required to devise and submit rehabilitation/ revival plans. Deviation(s) from target(s)/plan(s) are noted and the concerned entity is advised to take corrective action(s).


Privacy Policy | Terms of Use | Site Overview | Contact SECP
©SECP , Securities & Exchange Commission of Pakistan.