The Securities and Exchange Commission of Pakistan (SECP) in a statement has informed that currently, no regulatory framework is in place to allow crowd funding in the country. In a situation like this, people could lose their investments if they venture into such initiatives.
As a precautionary measure, the SECP has directed the public not to undertake any investments in the venture unless the company’s credentials have been declared worthy from the regulator.
The crowd-funding initiative- NEST was introduced by Arazi Ventures at the Fintech Disrupt Challenge 2016. The scheme promises an entry-level ticket for as low as Rs50,000 to own a small stake in a managed commercial or residential property.
In response, Arazi Ventures CEO Umair Sheikh clarified that the company would strengthen and lend complete support to the crowd-funding initiative once all regulatory approvals are sought from SECP.
Umair further added, “For now, we are only accepting offers from accredited and seasoned investors, who understand the risks involved in private investments.”
Sheikh has also been reported to have said that he hopes SECP and other concerned authorities will facilitate and draft a regulatory framework that helps support and develop the concept of crowd funding. He believes that the scheme has the potential to generate lucrative returns and is 100 pc safe and Sharia compliant.
