SECP on tightening company regulations to prevent fraudulent filing

March 15, 2024 (MLN): The Securities and Exchange Commission of Pakistan (SECP) has issued draft amendments to Regulation 50 of the Companies Regulations, 2024, for public comment.

The proposed amendment aims to prevent misleading or fraudulent filing of statutory returns, report changes in management and directorships, ensure return authenticity, and reduce management disputes.

The SECP has recently launched a new corporate registry, namely ‘eZfile, a user-friendly online portal for company filing.

As per proposed amendments, it would be mandatory to file processes for change of management and directors online through eZfile to ensure digitization and authenticity of change of management reports reported by the company.

Henceforth, no physical return for a change of management would be allowed to be filed by the companies with the Commission.

The proposed amendments outline a comprehensive procedure for reporting and verifying changes in company management, including appointment, election, resignation, retirement, and removal of directors and CEOs.

They also suggest that existing directors or CEOs not registered with the Commission through eZfile must register within three months of notification or before their resignation or retirement.

Public comments received within 14 days of the date of the notification shall be considered by the Commission.

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