ISLAMABAD – Federal Finance and Revenue Minister Senator Muhammad Aurangzeb presided over a Capital Market Development Council (CMDC) meeting to evaluate advancements in capital market reforms, emphasizing a strategic push to expand Pakistan’s corporate debt market as a vital long-term financing mechanism for the private sector.
Attendees assessed the current landscape of Pakistan’s capital markets, identifying gaps in the underperforming corporate debt sector despite robust equity market growth. The minister highlighted the urgency of deepening the debt capital market to reduce banking system dependency, promote market-based funding alternatives, and foster a resilient financial ecosystem tailored to private sector demands, particularly Small and Medium Enterprises (SMEs).
The council deliberated on an ongoing external study examining Pakistan’s local currency bond market, targeting reforms in sovereign financing, non-bank institutions, primary dealer frameworks, secondary market infrastructure, and derivatives markets. The minister urged the study to prioritize actionable, internationally benchmarked recommendations for sustainable development.
Findings from Securities and Exchange Commission of Pakistan (SECP) surveys and stakeholder consultations were reviewed, focusing on barriers restricting top-listed firms’ access to corporate debt. While acknowledging existing initiatives, the minister advocated extending outreach to medium-sized enterprises and growth-focused businesses to broaden market participation.
Senator Aurangzeb called for institutional restructuring, proposing the establishment of specialized Debt Desks at SECP and Pakistan Stock Exchange (PSX) with defined mandates, performance metrics, and accountability mechanisms. He emphasized fostering competition among market intermediaries to enhance efficiency, service quality, and cost reduction for issuers and investors.
Participants discussed streamlining corporate debt issuance through enhanced coordination between SECP, PSX, and Central Depository Company (CDC). A unified one-window listing framework, standardized procedures, and digital integration were proposed to improve accessibility and transparency for future issuers.
The meeting also addressed Islamic capital market development, including expanding the Sukuk market, bolstering secondary market liquidity, and promoting green and sustainable finance instruments. Taxation policies, SME readiness, financial literacy programs, and digital investor platforms were noted as critical areas for support.
Concluding, the minister stressed transitioning from policy discussions to execution, advocating for the formation of dedicated working groups focused on thematic reforms. He emphasized aligning stakeholder insights with international best practices to deliver measurable, time-bound outcomes with clear ownership and oversight mechanisms. Attendees included SECP’s chairman, State Bank of Pakistan representatives, PSX, CDC, National Clearing Company of Pakistan Limited, Pakistan Banks’ Association, Pakistan Business Council, and Tax Policy Office officials.
