The Securities and Exchange Commission of Pakistan (SECP) has introduced regulatory changes aimed at making it easier for established businesses to access funding through the Pakistan Stock Exchange (PSX).

Under amendments to the Public Offering Regulations, 2017, partnerships, Limited Liability Partnerships (LLPs), and carved-out business units will now be able to count their historical operating performance toward IPO eligibility requirements.

The move allows qualifying businesses to use profitability records earned before their conversion into public limited companies to meet the mandatory two-year profit track record required for a stock market listing.

According to the SECP, the changes are intended to encourage corporatization, reduce hurdles for businesses seeking public listings, improve the business environment, and expand participation in Pakistan’s capital markets.

The regulator said the revised framework will enable more mature businesses to tap equity financing for expansion without being disadvantaged by their recent corporate restructuring or incorporation.

To ensure investor protection, eligible firms must prepare revised financial statements covering at least the previous two financial years. These accounts must be audited by a Quality Control Review (QCR)-rated audit firm.

Companies will also be required to provide audited financial statements for the period during which they have operated as public limited entities. Additionally, sponsors’ shareholdings will remain locked in for two years after listing to ensure long-term commitment and market stability.

The SECP expects the reforms to support business growth, increase stock market participation, create employment opportunities, and strengthen the corporate sector by attracting more companies to the PSX.