SECP allows self-declaration for licensing applications by firms with foreign sponsors, directors

The Securities and Exchange Commission of Pakistan (SECP) has eased licensing requirements for companies with foreign sponsors or directors by allowing them to submit applications on the basis of a self-declaration undertaking instead of obtaining prior security clearance before applying.

Under the revised framework, licensing applications will be processed without security clearance at the application stage. However, the appointment of foreign directors will remain subject to clearance by the relevant authorities.

Applicants will be required to provide an undertaking that any proposed foreign director whose security clearance is denied will be replaced accordingly.

According to the SECP, the change is aimed at reducing procedural delays, improving regulatory certainty and facilitating foreign investment in Pakistan’s regulated financial services sector.

The revised framework will apply to companies operating in capital markets, non-banking finance, insurance and other regulated financial services sectors regulated by the commission.

Previously, companies with foreign directors were required to obtain security clearance before submitting licensing applications to the SECP. The regulator said the process often took considerable time and was viewed by investors as a barrier to establishing regulated financial businesses in Pakistan.

SECP Chairman Dr. Kabir Ahmed Sidhu said the revised framework balances investment facilitation with 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.

The SECP said the initiative forms part of its efforts to improve the ease of doing business and support investment in Pakistan’s financial services industry.