Proposed rules aim to strengthen corporate liquidation, rehabilitation and professional standards in Pakistan
The Securities and Exchange Commission of Pakistan (SECP) has invited public feedback on a proposed accreditation framework aimed at improving professional standards for official liquidators, provisional managers and insolvency experts.
The proposed framework is designed to strengthen the administration of corporate liquidation and rehabilitation cases under the Companies Act, 2017, and the Corporate Rehabilitation Act, 2018. The initiative seeks to establish a qualified pool of professionals capable of handling complex insolvency proceedings.
According to the SECP, the proposed measures are intended to improve the efficiency and transparency of liquidation and rehabilitation processes. The framework is also expected to strengthen safeguards for creditors while supporting the recovery of businesses that remain commercially viable despite financial difficulties.
Under the proposed system, professionals seeking empanelment as official liquidators or insolvency experts, along with individuals already empaneled by the Commission, would need to obtain professional certification in insolvency practice from the Institute of Financial Markets of Pakistan (IFMP).
The certification programme would consist of three stages and include both written and oral examinations. Practitioners would also be required to complete annual continuing professional development requirements to maintain and enhance their expertise in insolvency-related matters.
The framework further proposes a dedicated code of conduct for official liquidators and provisional managers. Provisional managers play an interim role during corporate proceedings, making professional standards and accountability important aspects of the proposed system.
The SECP said the framework also responds to capacity-related gaps highlighted in the World Bank’s 2022 Report on the Observance of Standards and Codes. In developing the proposal, the regulator has also considered insolvency practices followed in jurisdictions including the United Kingdom, Singapore, Malaysia and India.
The public consultation is intended to gather stakeholder views before the proposed framework is finalized. Feedback from professionals and other relevant stakeholders could help shape the accreditation and oversight requirements for insolvency practitioners in Pakistan.