Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, chaired a meeting of the Capital Market Development Council (CMDC) to review progress on capital market reforms, with particular focus on accelerating the development of Pakistan's corporate debt market and strengthening capital markets as an important source of long-term financing for the private sector.
The meeting reviewed the current state of Pakistan's capital markets, with particular focus on accelerating the development of the corporate debt market and broadening access to diversified financing sources. The Finance Minister observed that while the equity market has demonstrated encouraging progress, the corporate debt market continues to remain underdeveloped relative to the financing needs of the economy. Further efforts are required to deepen the debt capital market, reduce reliance on bank financing, promote diversified market-based financing, and create a more balanced and resilient financial ecosystem capable of meeting the evolving financing needs of the private sector, particularly, the Small and Medium Enterprises (SMEs).
The participants discussed the scope and terms of reference (TORs) of a detailed external study on the development of Pakistan's local currency-linked bond market, which is underway. The study will encompass key reform priorities across sovereign financing, non-bank financial institutions, primary dealer arrangements, secondary market development, market infrastructure, development of hedging and derivatives markets, and the broader capital market ecosystem. The Finance Minister emphasized that the study should provide practical, evidence-based recommendations supported by international benchmarking to guide future reforms.
The meeting also took stock of findings from the awareness and experience surveys and stakeholder consultations undertaken by the Securities and Exchange Commission of Pakistan (SECP) to assess the challenges faced by the top-100 listed companies in accessing the corporate debt market in Pakistan. While appreciating the initiatives already undertaken, the Finance Minister highlighted the need to expand engagement beyond the largest listed companies to include a broader segment of medium-sized enterprises and other growth-oriented businesses that could benefit from capital market financing.
Senator Muhammad Aurangzeb underscored the need for dedicated institutional capacity to accelerate debt market reforms and advised the SECP and the Pakistan Stock Exchange (PSX) to establish dedicated Debt Desks at the senior management level with clearly defined mandates, measurable performance indicators, and responsibility for driving implementation and reporting progress.
The Finance Minister also emphasized the need to foster a more competitive and efficient capital market ecosystem by encouraging greater institutional capacity and competition among market intermediaries and market infrastructure providers, with a view to improving market efficiency, enhancing service quality, and reducing transaction costs for both issuers and investors.
Participants also deliberated on simplifying the corporate debt issuance process through greater coordination among the SECP, PSX, and Central Depository Company (CDC). In this regard, the Finance Minister called for the development of a streamlined one-window listing framework supported by standardized procedures, end-to-end process mapping, greater digital integration, and enhanced digital facilitation to improve transparency and ease of access for prospective issuers, while publishing a simplified corporate debt listing workflow on their respective websites.
Discussions further covered the continued development of Pakistan's Islamic capital market, including measures to deepen the domestic Sukuk market, strengthen secondary market liquidity and trading, and facilitate greater issuance of green and sustainable financial instruments. The participants also reviewed policy proposals relating to taxation, SME preparedness, financial literacy, digital distribution platforms to broaden investor participation, and institutional support aimed at enabling a broader range of businesses to access capital market financing.
Emphasizing the need to move from discussion to implementation, Senator Muhammad Aurangzeb underscored that the Council's future work should be organized around thematic reform areas supported by dedicated working groups to accelerate decision-making and execution. He stressed that recommendations emerging from stakeholder consultations, technical studies and international best practices should be translated into time-bound and actionable reform measures with clearly defined ownership, milestones, and periodic progress reviews.
The meeting was attended by Chairman SECP, representatives of the State Bank of Pakistan, PSX, CDC, National Clearing Company of Pakistan Limited, Pakistan Banks' Association, Pakistan Business Council, Tax Policy Office along with senior officials of the Finance Division.
