Pakistan’s Securities and Exchange Commission (SECP) overhauled its Public Offering Regulations, 2017, effective August 6, 2025, then issued a final amendment on May 25, 2026. The 2025 changes expanded who may advise on equity offerings and replaced the single Book Runner model with an Eligible Participant framework for book building. The 2026 amendment added a conditional route for certain issuers to rely on qualifying predecessor-business operations when demonstrating their financial track record. A separate SECP amendment listed in August 2026 is a draft, not a final rule.
Who and what the regulations cover
The Public Offering Regulations, 2017 apply to public limited companies and other bodies corporate proposing to issue securities to the public, as well as offerors intending a public offer. The framework also addresses participants in the offering process, including sponsors, Consultants to the Issue, underwriters, Eligible Participants for Book Building, Designated Institutions, bankers to an issue, investment agents, and issuing and paying agents. SECP describes the broader public-offering regime as covering equity securities, debt instruments, and units of REIT schemes offered to the public. SECP’s consolidated regulations provide the operative text.
What changed in the 2025 overhaul
SECP notified the 2025 amendments through S.R.O.1477(I)/2025 on August 6, 2025, and said the revamped regime took effect that day. SECP stated that future IPO transactions should follow the amended regulations. The changes revised provisions across the framework, including definitions, role descriptions, and the public-offering process. The notification and SECP’s announcement set out the changes and its stated rationale.
More institutions may advise on equity offerings
Banks and development finance institutions may act as Consultants to the Issue for equity offerings under the revised framework. This broadens the eligible pool for that role; it does not, by itself, establish how many institutions will take it up or what effect it will have on offering costs.
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The amendments replaced the single Book Runner model with the concept of “Eligible Participants” for book building. SECP said the change was intended to encourage wider investor participation and more transparent price discovery. Those are stated policy aims, not measured results: SECP did not publish an outcome statistic establishing that IPOs became faster, cheaper, or more successful as a result.
What the May 2026 final amendment means for issuer track records
S.R.O.903(I)/2026, dated May 25, 2026, amended the 2017 regulations. It provides a conditional route for some issuers that do not have two profitable preceding financial years as a company to rely on qualifying earlier operations conducted as a partnership, limited liability partnership (LLP), or carved-out business division. This is not a blanket waiver of the track-record requirement: the predecessor operations and supporting records must meet specified conditions. The final notification sets out the requirements.
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Audit and sponsor-retention conditions
For the predecessor period to qualify, its financial statements must comply with the prescribed company accounting and disclosure framework and be audited by a QCR-rated firm. The issuer must also submit its company-period financial statements, which must be audited. Sponsors must retain their entire shareholding for at least two years after the last public-subscription date.
Additional disclosure for predecessor operations
The amendment calls for disclosure explaining the issuer’s conversion from a partnership or LLP, or the transfer of a carved-out division. That disclosure includes the predecessor’s identity and how assets, liabilities, and business operations were transferred. Relevant risk factors include standalone financial performance, operational and integration risks, management changes, dependence on a parent, license-transfer issues, and customer and supplier risks.
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Where applicable, issuers with predecessor operations must provide financial highlights and key ratios for the three preceding financial years. The notification also addresses audited-account submissions and includes a specific exception for certain regulated debt issuers when their latest audited accounts are delayed for reasons outside the company’s control.
Final rules versus the August 2026 draft
SECP’s drafts page lists S.R.O.1276/2026(I), dated August 5, 2026, as a draft amendment to the Public Offering Regulations, 2017. A draft is not an effective requirement; do not treat proposed terms as binding unless and until SECP issues a final notification. SECP’s regulations index lists the consolidated regulations as updated through May 25, 2026, so that text incorporates the final amendment discussed above, not the later draft. Check SECP’s drafts page for the proposal’s status and its regulations index for published regulations.
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How to assess a particular offering
The applicable requirements depend on the issuer, offer, and transaction timing. An issuer or adviser assessing a planned offering should identify the offer type and issuer form, determine whether the issuer relies on its own financial history or predecessor operations, and check the applicable provisions and schedules in the consolidated regulations against the relevant notification. The May 2026 predecessor route is conditional, so its audit, disclosure, and sponsor-retention requirements need to be reviewed alongside the issuer’s facts. For a transaction-specific interpretation, consult qualified Pakistani securities counsel.
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