The Securities and Exchange Commission of Pakistan (SECP) has revised the eligibility criteria for audit firms appointed by financial institutions and other regulated entities, updating the categories of auditors permitted to conduct statutory audits across different sectors.
Through Circular No. 24 of 2026, dated October 9, the commission partially amended Circular No. 7 of 2026, which established the list of approved auditors for SECP-regulated entities.
The changes cover entities operating under the Securities Act, 2015, the Futures Market Act, 2016, the Insurance Ordinance, 2000, and the Companies Act, 2017.
According to the official SECP circular, the revised criteria will apply to auditor appointments by lending non-banking finance companies (NBFCs) for financial years beginning on or after January 1, 2027.
The revised framework classifies audit firms according to the type of regulated entity, licensing category and applicable asset thresholds.
First Category Covers Major Financial and Regulated Entities
The first category allows approved audit firms to audit a broad range of regulated institutions, including securities exchanges, futures exchanges, clearing houses, depository companies and securities brokers holding both trading and clearing licences.
It also covers asset management companies and pension fund managers with assets under management of Rs50 billion or more.
Other eligible entities include lending NBFCs accepting deposits, non-deposit-taking lending NBFCs with assets of Rs1 billion or more, and modarabas with assets of at least Rs1 billion.
Collective investment schemes, voluntary pension schemes and real estate investment trusts (REITs) with assets of Rs10 billion or more also fall within this category.
The framework further includes insurance, reinsurance and takaful operators with total assets exceeding Rs10 billion, as well as collateral management companies, credit rating companies and professional clearing members.
The approved audit firms in this category are:
- A.F. Ferguson & Co.
- Baker Tilly Mehmood Idrees Qamar
- BDO Ebrahim & Co.
- Crowe Hussain Chaudhury & Co.
- EY Ford Rhodes
- Grant Thornton Anjum Rahman
- Ilyas Saeed & Co.
- KPMG Taseer Hadi & Co.
- Kreston Hyder Bhimji & Co.
- Muniff Ziauddin & Co.
- Nasir Javaid Maqsood Imran
- Parker Russell A.J.S.
- Rahman Sarfaraz Rahim Iqbal Rafiq
- Reanda Haroon Zakaria Aamir Salman Rizwan & Co.
- Riaz Ahmad & Co.
- Rizwan & Co.
- RSM Awais Hyder Liaquat Nauman
- S.M. Suhail & Co.
- Yousuf Adil
- UHY Hassan Naeem & Co.
Separate Auditor Category for Smaller Entities
The SECP has also established a separate category for smaller regulated entities, with eligibility determined by licensing status and asset size.
This category includes securities brokers holding trading and self-clearing licences, asset management companies and pension fund managers with assets under management below Rs50 billion, and non-deposit-taking lending NBFCs with assets below Rs1 billion.
Modarabas with assets below Rs1 billion are also covered, alongside collective investment schemes, voluntary pension schemes and REITs with assets below Rs10 billion.
Insurance, reinsurance and takaful operators with total assets of Rs10 billion or less are included in the category.
The approved firms are:
- Amin Mudassar & Co.
- Fazal Mahmood & Co.
- H.A.M.D & Co.
- Junaidy Shoaib Asad
- Malik Haroon Ahmad & Co.
- Mushtaq & Co.
- Naveed Zafar Ashfaq Jaffery & Co.
- PKF F.R.A.N.T.S.
- Riaz Ahmad, Saqib, Gohar & Co.
- ShineWing Hameed Chaudhri & Co.
- Tariq Abdul Ghani & Co.
The categories establish which firms are eligible to audit different types of regulated entities. Institutions should therefore check the applicable category and thresholds before appointing an auditor.
Other Regulated Entities Can Appoint ICAP-Rated Auditors
The commission has set out a separate arrangement for certain other regulated entities, which may appoint audit firms holding a satisfactory quality control review rating from the Institute of Chartered Accountants of Pakistan (ICAP).
These entities include securities brokers operating in the trading-only category, futures brokers registered with the Pakistan Mercantile Exchange, securities and futures advisers, insurance and reinsurance brokers, third-party administrators, corporate restructuring companies and trusts established by such companies.
The category also covers modarabas with assets below Rs200 million, share registrars and balloters.
However, additional requirements apply to entities that qualify as public interest companies under the Third Schedule to the Companies Act, 2017.
The SECP has clarified that these entities must also appoint auditors registered with the Audit Oversight Board under Section 36K(a) of the SECP Act, 1997.
Asset management companies appointing auditors for collective investment schemes must also comply with SECP Direction No. 05, issued on February 23, 2026, along with any subsequent directions issued by the commission.
What the Revised Criteria Mean for Regulated Entities
The updated framework makes auditor eligibility dependent on the regulated entity’s business category, licensing status and relevant asset thresholds.
These requirements are particularly important for financial institutions preparing for audit appointments covering financial years beginning in 2027.
Regulated entities should review the revised circular alongside the original Circular No. 7 of 2026 to determine which requirements apply to their operations.
The complete regulatory documents are available through the SECP’s official circulars and notifications section.
