ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has made amendments to the Listed Companies (Code of Corporate Governance) Regulations 2019 and Companies (Postal Ballot) Regulations 2018 with the view to safeguard shareholders’ rights and enhance corporate governance practices.

Under these reforms, the category-wise voting scheme has been omitted to support minority shareholders’ representation on the board.

The scrutiniser’s role has been enhanced to bring transparency in accepting or rejecting nominations for the election of directors and proxies.

Reforms were also incorporated to enhance corporate governance by including provisions for mandatory attendance of directors in the general meetings and encouraging independent evaluation of board performance by an external body.

Earlier, the SECP constituted a committee comprising market experts and relevant stakeholders to enhance transparency and improve the holding of the shareholders’ meetings. The SECP has conducted extensive public consultation on the committee’s report, following which the reforms were proposed in light of the committee’s recommendations. Public consultation was also carried out on the proposed reforms.

The amendments in the Listed Companies (Code of Corporate Governance) Regulations, 2019 and the Companies (Postal Ballot) Regulations, 2018 are posted on the SECP website.

Meanwhile, the SECP has issued a circular introducing enhanced disclosure requirements for Fund Manager Reports (FMRs) by Asset Management Companies (AMCs).

These measures will promote transparency and enable investors and unitholders of Collective Investment Schemes (CIS) to make more informed decisions.

Key enhancements include disclosure of Actual Expenses as a percentage of net assets, applicable sales loads, monthly Portfolio Turnover Ratios, risk-adjusted return, Yield to Maturity, Modified Duration, Macaulay Duration, Beta and Standard Deviation.

Further, FMR must also disclose a comparative analysis of benchmark and committed returns. In addition, index descriptions and tracking difference history for ETF are also mandated.

To ensure consistency and accuracy in disclosures, the Mutual Funds Association of Pakistan (MUFAP) has been tasked with developing a standardised methodology for calculating the prescribed quantitative measures.

The enhanced disclosures will become effective immediately upon SECP’s approval of the MUFAP methodology.

This initiative reflects SECP’s continued commitment to improving market integrity, transparency, and investor protection in the asset management industry.

Published in Dawn, March 30th, 2025