ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has introduced strict measures to prevent companies from accepting funding from blacklisted or unregistered International Non-Governmental Organizations (INGOs) operating within Pakistan.
In a notification issued on Monday, the SECP proposed amendments to the Companies Regulations, 2024, emphasizing that companies must not receive funding from blacklisted INGOs or those without proper registration in Pakistan.
Under the revised regulations, newly incorporated companies must register with their respective Provincial Charities Commission and provide proof of registration within six months. Existing companies are required to comply within one year of the regulation’s enactment.
Furthermore, companies must maintain a website featuring information specified in Annexure V of the regulations. For existing entities transitioning to a section 42 company, the associated trust or society must be dissolved within 90 days of incorporation, with proof of dissolution and an auditor’s certificate submitted to the SECP. Failure to comply will trigger a license revocation process, potentially leading to the company’s deregistration.
Key changes for section 42 companies include the requirement for large-sized entities to employ a full-time CEO. Small section 42 companies must appoint a statutory auditor with a Quality Control Review (QCR) rating, while medium and large companies must engage auditors certified by the Audit Oversight Board (AOB). Additionally, medium and large companies are required to obtain Pakistan Centre for Philanthropy (PCP) certification every three years and inform the SECP within six months of certification.
The SECP also mandated that the approval of foreign directors or members will only be granted following security clearance from the Ministry of Interior.
These regulatory changes aim to enhance transparency, ensure compliance, and safeguard the integrity of Pakistan’s corporate and charitable sectors.
