SECURITIES AND EXCHANGE

COMMISSION OF PAKISTAN
Content
• Introduction
• History
• About SECP
• Objectives
• Functions of SECP
• Organizational Structure
• SECP Divisions
• Single Member Company (SMC)
• Process of registering a Private Company
Introduction
• The Securities and Exchange Commission of Pakistan is the
financial regulatory agency in Pakistan whose objective is to
develop a modern and efficient corporate sector and a capital
market based on sound authority principles, in order to encourage
investment and foster economic growth and prosperity in
Pakistan.
• The head office of SECP is located in the Blue Area of Islamabad.
• The current mandate of the SECP includes the following main
points
. Insurance companies
. Private pensions Corporate sector
. capital market
. Non-banking finance companies
History
• The Securities and Exchange Commission of Pakistan (SECP)
is the successor of the erstwhile Corporate Law Authority
(CLA), which was an attached department of the Ministry of
Finance.
• The process of restructuring the CLA was initiated in 1997
under the Capital Market Development Plan of the Asian
Development Bank (ADB).
• A Securities and Exchange Commission of Pakistan Act was
passed by the Parliament and promulgated in December 1997.
• Securities and Exchange Commission of Pakistan Act became
operational on January 1 1999.
About SECP
Vision Statement
The development of modern and efficient corporate sector and
capital market, based on sound regulatory principles, that provide
impetus for high economic growth and foster social harmony in
the Country.

Mission Statement
To develop a fair, efficient and transparent regulatory framework,
based on international legal standards and best practices, for the
protection of investors and mitigation of systemic risk aimed at
fostering growth of a robust corporate sector and broad based
capital market in Pakistan.
Strategy
The strategy of SECP is to develop an efficient and active
regulatory body, ensures proper risk management
procedures in the capital market and protects investors
through responsive policy measures and effective
enforcement practices.
Objectives
These are the major objectives of SECP:
• It was initially concerned with the regulation of corporate
sector and capital market.
• They are concerns with the supervision and regulation of
insurance companies, non-banking finance companies and
private pensions.
• The SECP has also been entrusted with oversight of various
external service providers to the corporate and financial
sector.
Functions
SECP’s main functions includes following:
• Incorporation/registration of companies.
• Regulation of securities market and related
• Credit Rating Companies and Moradabad
• Administration of the company law.
• Regulation of non-banking finance companies, Investment
banks, mutual fund, insurance business and private pensions.
• Guiding the business in stock exchange and any other securities
market.
• Encouraging the organized development of the capital market
and the corporate sector in Pakistan.
• Prohibits the fraud and unfair trade practices relating to
securities market.  
Organizational Structure
Commission
Commission of SECP is consist of Commissioners, including
chairman. Commission is based on 5-7 members. The
commissioner is Appointed by the Federal Government.
It has some expertise in,
• Securities market
• Law
• Accountancy
• Economics
• Finance [insurance]
• Industry
Chairman
• The Chairman is the CEO of the Commission he provides
assistance and advice on various day-to-day issues. He also
provides his input in processing new laws amendments to
existing laws and rules and regulations.
• The Chairman has his own Secretariat that's called Chairman's
Secretariat it is responsible for managing Chairman's official
schedule engagements and correspondence it coordinates with
internal and external stakeholders on behalf of the Chairman.
Divisions
There are six divisions of SECP
• Company law division
• Prosecution and legal affairs division
• Support services division
• Securities market division
• Specialized companies division
• Insurance division
Company law division
It is responsible for incorporation and dissolution of companies
and acceptance or maintenance of information it also monitors
and enforces the corporate legal framework to promote
transparency, accountability, good corporate governance and
practices.
In this division there are further departments.
• Corporate supervision department
• Corporatization and complies department
Prosecution and legal
affairs division
Provides as the name suggests prosecution litigation and
legislative support like the previous division
This division has two further departments
• Advisory department
• Legislative review and research department
Support services division
It basically provides administrative support unlike the other two
divisions
This division is also divided into further departments.
• Human resource department
• Finance department
• Administration department
Securities market division
It monitors regulates and develops the capital markets it
regulates the primary and secondary markets as well as licensed
entities and regulated persons through licensing surveillance
investigation enforcement and rule making.
This division has further five departments
• Policy regulation and development department
• Primary market approval and development Department
• Broker compliance department
• Information systems and technology Department
• Investor education and international relations department
Specialized companies
division
It provides regulatory environment for a robust non-banking
financial and Madaba sector
It also registers Madaba companies in this commissioner's office.
It has two departments
• Policy regulation and development department
• Supervision and enforcement department
Insurance division
The insurance division regulates supervises and promotes sound
development of insurance sector which includes life and non-life
insurance companies at the carful operator’s insurance inspectors
and intermediaries.
There are further departments
• Market Policy development department
• Supervision Department
Departments
There are further more departments that are under commissioners
• Media Corporate Communication Department
• Islamic Finance Department
• Professional Development Department
• Systemic Risk Department
Single Member Company
(SMC)
A Single Member Company or SMC is a business that is set up
as separate legal entity from its owner and has only one
shareholder.
The Single Member (Director) has all control of the company
and can remove or appoint any officer
• Features of single Member company
• Advantages of single member company
Features of SMC
• A distinct legal entity, separate from single member;
• Limited liability of the member
• Elevated entity status, long life of enterprise having perpetual
succession
• Compact organizational structure
• Defined legal frame work
• Part of documented and regulated sector
• Simple corporate record
• Better access to capital markets
• Easy to raise funds
Advantages of SMC
• There would be no chances of disputes
• The single-member company would enjoy the tax benefits
• Business of a sole proprietor should not be disturbed with his
death
• Disputes among the heirs.
• There would be no restrictions on the business of a single-
member company.
Process of registering a
Private Company
The process of incorporating a company in Pakistan includes five
basic steps.
Step – 1: Company Name Reservation
Step – 2: Preparation for documents of Incorporation
Step – 3: Fee of Incorporation/ Challan Fee
Step – 4: Verification of Documents
Step – 5: Certificate of Incorporation
1. Company Name Reservation
The first step is followed to reserve the name of the company.
While selecting the name it should be considered that the name:
• Should not contains word or expression notified by the
Commission
• Is not inappropriate, undesirable or deceptive
• Does not exploit or offend the religious sentiments of the people
• Is not a name identical with the name of the company already
registered.
• Not closely resemble with the name of the company already
registered.
• Whatever name is proposed, the final authority to decide
whether a name is in line with the provisions of the Act lies with
the Commission.
Publication of Name
After the name is finalized, the company name is published in
following ways:
• The name of company must be published in one Urdu and one
English Newspaper which is circulated nationwide. Whenever,
the new name is used the old name of company should be
mentioned in brackets for at least three months.
• The name must be published in every document of the
company i.e. the letter-head, sales revenue and business.
• The company name should be engraved on seal.
2. Preparation for
documents of Incorporation
The main documents prepared during the process of
incorporation are:
• Memorandum of Association (MOA)
• Article of Association (AOA).
These documents are drafted right after the individual issues the
application for availability of name.
Memorandum of Association
This document is stated as an external constitution of the
company containing seven clauses. It is the main document of
company for investors and public i.e. outside the company.
Clauses of Memorandum of Association
• Name clause
• Registered office clause
• Principal line of business clause
• Undertaking clause
• Liability clause
• Authorized capital clause
• Subscription clause
Article of Association
• This document shows the rules on which the company
runs.
• The registration of the articles of association is
compulsory requirements for a company limited by
guarantee and an unlimited company.
• The articles of an unlimited company or a company
limited by guarantee (if both have no share capital) shall
state the number of members with which the company
proposes to be registered.
3. Fee of Incorporation/
Challan Fee
The incorporation fee is attached to share capital and can
calculate it online using the Incorporation Fee Calculator.
• Offline payment: Individual uploads the deposit receipt before
you can submit the process.
• Online payment: Individual submits the process and then it
will appear in the online payment section of eservices from
where he/she can make the online payment.
4. Verification of Documents
• After preparation of all required documents, the individual
submits them before the registrar of the company.
• After submitting the documents, the registrar verifies the
documents that either are there any deficiency or not.
• If there is no deficiency, then registrar issues the certificate and
records the documents in register.
5. Certificate of Incorporation
• This certificate will be issued by the registrar.
• SECP will take about seven working days to complete the
process.
• Individual can pick up the Incorporation Certificate from the
concerned Company Registration Office (CRO) by showing a
copy of the payment receipt or it will be delivered to your
registered address after seven working days.
Certificate issued by SECP for
incorporation of the company
Conclusion
• The Securities and Exchange Commission of Pakistan (SECP)
has taken an aggressive lead in strengthening the regulatory
framework that protects investors’ interest.
• It is launching a program to broaden the reach of the capital
market investment products to savers across the nation.
• It is accelerating regulatory approvals for listing of new
companies, launching of new products such as REITS (Real
Estate Investment Trusts) and Government Debt Securities
secondary market trading.
• SECP has taken a lead in pushing forward with the launch of
Small & Medium Enterprise (SME) segments, said an official
talking to his scribe.