This is the institutional statute behind the regulator, not company law itself. The Securities and Exchange Commission of Pakistan Act, 1997 (Act XLII of 1997), amended by the SECP (Amendment) Act, 2016, establishes SECP, defines its powers, and lists every law it administers — including the Companies Act, 2017. Where the Companies Act tells a company what to do, this Act is what gives the Commission the authority to make that Act’s rules, investigate breaches of it, and enforce it.
The Commission and the Board
The Commission has between five and seven Commissioners (including the Chairman), a majority of whom must always be private-sector persons known for integrity and expertise across the securities market, law, accountancy, economics, finance, or industry (Sections 3-5). The Chairman cannot serve more than two consecutive terms; no one over 62 can be appointed a Commissioner, and a Commissioner must retire at 65 (Sections 6-7). Separately, the Securities and Exchange Policy Board has eleven members — five ex-officio (the Finance, Law, and Commerce Secretaries, the SECP Chairman, and a State Bank Deputy Governor) plus six private-sector appointees serving four-year terms — and is the body that makes policy decisions, as distinct from the Commission’s day-to-day regulatory role (Sections 12, 21). Commissioners and Board Members must disclose conflicts of interest before any relevant discussion; failing to do so is itself an offence (Sections 16-17).
What the Commission actually regulates (Section 20)
Section 20(4) sets out SECP’s functions in detail — among them: regulating the issue of securities and the stock exchanges; registering and regulating brokers, share transfer agents, trustees, underwriters, and other market intermediaries; regulating substantial acquisition of shares and the merger and takeover of companies (see the Takeovers page on this site); investigating insider trading and market abuse; promoting good corporate governance (the basis for the CCG Regulations); administering insurance law; and facilitating Shariah-compliant financial products. Schedule I lists the full set of “administered legislation” this Act’s powers extend to — the Companies Act, 2017 heads the list, alongside the Securities and Exchange Ordinance 1969, the Modaraba Companies Ordinance 1980, the Central Depositories Act 1997, the Insurance Ordinance 2000, the Stock Exchanges (Corporatization) Act 2012, and the Securities Act 2015.
Inspection, investigation and enforcement
The Commission can inspect any regulated person’s records to check compliance (Section 28A), and authorise a formal investigation into a suspected offence, fraud, misfeasance, or conduct not in investors’ interest (Section 29) — investigators have the same powers as a civil court to summon witnesses, compel document production, and take evidence on affidavit (Section 30(1A)). Entering premises to search and seize evidence requires a written order signed by a Commissioner, and forcible entry needs a separate, specifically authorised order (Sections 30-31); an investigating officer who acts vexatiously or in bad faith faces dismissal and criminal liability. The Commission can also simply call for information or documents from anyone, notwithstanding any other law including banking secrecy (Section 31A), and examine any person acquainted with the facts of a case under oath (Section 32).
Confidentiality
Anyone who is or was a Board Member, Commissioner, or employee is bound not to disclose information they acquired in that role except for official purposes — contravention is itself an offence (Section 35), though disclosure to a court, in the public interest, or to the Commission itself is always permitted (Section 36).
Audit Oversight Board (Sections 36H-36CC)
A separate, independent Audit Oversight Board (AOB) — seven members appointed on the recommendation of a nominating committee that includes the Finance Secretary, the SECP Chairman, the ICAP President, and the State Bank Governor — registers and deregisters the audit firms entitled to audit public interest companies, oversees ICAP’s own Quality Assurance Board, and can bar a firm from auditing public interest companies for up to five years or impose penalties up to Rs. 5 million for non-compliance. This is the registration the CCG Regulations require a listed company’s external auditor to hold (see the External Audit section of the CCG Regulations page).
Appeals and enforcement
No court below the Court of Sessions can take cognizance of an offence under this Act except on a complaint from a Commission-authorised officer (Section 37); prosecutions are conducted by a special public prosecutor appointed by the Commission (Section 38). A person aggrieved by a Commission order can appeal to the Commission’s own Appellate Bench (at least two Commissioners who weren’t involved in the original decision) within 30 days, and from there to the Court within 60 days (Sections 33-34). The Commission, its Chairman, Commissioners, and employees are indemnified against suits for anything done in good faith under this Act (Section 42A), and penalties the Commission imposes can be recovered as a decree for payment of money, including attachment of property (Section 42B).