The Securities and Exchange Commission of Pakistan (SECP), to improve ease of doing business and facilitate startups, has proposed amendments to the Companies Act 2017.
The regulator has issued a draft of the Companies (Amendment) Ordinance 2020, containing new measures for greater ease of doing business for the corporate sector.
These amendments will now go through the legislative process before becoming law. In this regard, the legal amendments have been proposed in the Companies Act 2017 for consultation.
According to the available documents, the commission may implement measures for providing greater ease of doing business, improving regulatory quality and efficiency and facilitating innovation and the use of technology in conducting business by the corporate sector, including but not limited to:
- Formalizing existing practices through regulations and implementing other measures for attaining international standards of regulatory quality and efficiency for greater ease of doing business.
- Specifying modes and procedures for enabling greater ease of entry into and exit from the market to startup companies.
- Constituting special task groups from the corporate sector for encouraging the use of financial technology in the conduct of business.
- Creating environments for testing and examining the impact of innovation, new processes or technologies outside the existing regulatory framework including but not limited to crowdfunding, digital assets, Open APIs, Smart Contracts, Cloud-based solutions and allowing the establishment and use of regulatory sandboxes
- Encouraging the use of technology for providing and meeting regulatory reporting requirements, risk assessment, customer due diligence, the issuance of suspicious transaction reports, keeping records and such other requirements as may be specified to meet anti-money laundering and counter-terrorism financing standards.
- Improving regulatory compliance and specifying proportionate data-driven standards for the corporate sector to take measures for cybersecurity, data sovereignty and algorithm supervision.
- Specifying exemptions and incentives under the prevailing laws with the object of fostering innovation, promoting startups and entrepreneurship ecosystem in line with international best practices.
- Prescribing such other frameworks as may be notified by the Commission for stimulating innovation and financial inclusion in the conduct of business by the corporate sector through the use of financial technology, regulatory technology, and supervisory technology.
The commission may take other similar measures prior to the issuance of regulations as it may deem fit through guidelines, policy papers, frameworks or any other modes or mechanisms.
You can read the full draft here.