Finance Minister Muhammad Aurangzeb on Friday directed regulators to accelerate reforms aimed at developing Pakistan's corporate debt market, saying businesses need broader access to long-term financing beyond traditional bank lending.
Chairing a meeting of the Capital Market Development Council (CMDC), the minister said Pakistan's equity market has made encouraging progress, but the corporate debt market remains underdeveloped relative to the financing needs of the economy. He said deeper debt capital markets would help reduce reliance on bank financing, promote diversified market-based funding and build a more resilient financial system, particularly for small and medium enterprises (SMEs).
The council reviewed progress on capital market reforms and discussed an ongoing external study on developing Pakistan's local currency-linked bond market. The study will examine reforms related to sovereign financing, non-bank financial institutions, primary dealers, secondary market development, market infrastructure, hedging and derivatives, and the broader capital market ecosystem.
Aurangzeb said the study should deliver practical, evidence-based recommendations backed by international benchmarks to guide future reforms.
The meeting also reviewed findings from surveys and stakeholder consultations conducted by the Securities and Exchange Commission of Pakistan (SECP) on the challenges faced by the country's 100 largest listed companies in accessing the corporate debt market. The finance minister said engagement should extend beyond major listed firms to include medium-sized and growth-oriented businesses that could benefit from capital market financing.
To speed up reforms, Aurangzeb directed the SECP and the Pakistan Stock Exchange (PSX) to establish dedicated debt desks at the senior management level with clear mandates, measurable performance indicators and responsibility for implementing and tracking reforms.
He also called for greater competition among market intermediaries and infrastructure providers to improve efficiency, enhance service quality and lower transaction costs for issuers and investors.
The council discussed simplifying the corporate debt issuance process through greater coordination among the SECP, PSX and the Central Depository Company (CDC). Aurangzeb directed the institutions to develop a one-window listing framework supported by standardized procedures, end-to-end digital integration and a simplified corporate debt listing process to improve transparency and make it easier for companies to raise funds.
Participants also reviewed proposals to deepen Pakistan's Islamic capital market by expanding the domestic Sukuk market, improving secondary market liquidity and encouraging the issuance of green and sustainable financial instruments.
The meeting also discussed taxation proposals, measures to improve SME readiness, financial literacy initiatives, digital investment platforms and institutional support to help more businesses access capital market financing.
Concluding the meeting, Aurangzeb said future work of the council should be organized through dedicated thematic working groups to ensure recommendations from technical studies, stakeholder consultations and international best practices are translated into time-bound reforms with clear ownership, implementation milestones and regular progress reviews.
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