ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has relaxed its licensing requirements for companies with foreign sponsors or directors, allowing applications to be submitted without prior security clearance at the initial stage.
According to a press release, applicants will now proceed on the basis of a self-declaration undertaking, aimed at reducing delays and improving ease of doing business.
Revised Licensing Framework
Under the new procedure, SECP will process licensing applications without requiring security clearance for foreign directors at the time of submission.
However, final appointment of foreign directors will remain subject to clearance from the relevant authorities.
Companies will be required to replace any director whose clearance is later denied.
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Objective of the Reform
The move is designed to streamline regulatory procedures, reduce processing time, and encourage foreign investment in Pakistan’s regulated financial sectors.
It applies to capital markets, non-banking finance companies, insurance firms, and other regulated financial services.
Earlier Requirement
Previously, security clearance for foreign directors was mandatory before submitting licensing applications, often causing delays and concerns among investors.
SECP Statement
SECP Chairman Dr Kabir Ahmed Sidhu said the revised framework balances investment facilitation with regulatory oversight.
He added that the measure will help genuine investors enter the market more efficiently while ensuring compliance with legal and security requirements.
FAQs
What is the key change in SECP rules?
Security clearance is no longer required before submitting licensing applications.
Is clearance still necessary?
Yes, but it will be obtained after application submission.
What must companies provide now?
A self-declaration undertaking regarding foreign directors.
Which sectors are affected?
Capital markets, insurance, NBFCs, and other regulated financial sectors.
What is the purpose of the reform?
To reduce delays and promote foreign investment.
