The Securities and Exchange Commission of Pakistan (SECP), in a major facilitation measure, has allowed companies with foreign sponsors or directors to submit licensing applications via self-declaration undertaking instead of obtaining prior security clearance of foreign directors from relevant departments.
Under the revised framework, the regulator would process licensing applications without requiring security clearance at the application stage. However, the appointment of foreign directors would remain subject to clearance by the relevant authorities. Applicants would be required to provide an undertaking that any proposed director whose security clearance is denied will be replaced accordingly.
The measure is expected to reduce procedural delays, improve regulatory certainty, and facilitate foreign investment in Pakistan’s regulated financial services sector. The revised framework will benefit companies operating in capital markets, non-banking finance, insurance, and other regulated financial services sectors.
Previously, companies with foreign directors were required to obtain security clearance before submitting their licensing applications to SECP. The process often took considerable time and was viewed by investors as a barrier to establishing regulated financial businesses in Pakistan.
SECP Chairman Kabir Ahmed Sidhu said the revised framework strikes an appropriate balance between facilitating investment and maintaining regulatory oversight. He said the measure would enable genuine investors to enter Pakistan’s regulated financial sector more efficiently while ensuring compliance with applicable laws and security requirements.