ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has introduced a new measure allowing companies with foreign sponsors or directors to submit licensing applications based on a self-declaration undertaking, eliminating the need for prior security clearance from relevant departments at the application stage.

According to Securities and Exchange Commission of Pakistan, the revised framework will enable SECP to process licensing applications without requiring security clearance initially. However, the appointment of foreign directors will still be contingent on clearance by the relevant authorities. Applicants must provide an undertaking to replace any proposed director whose security clearance is denied.

This initiative is expected to reduce procedural delays, enhance regulatory certainty, and facilitate foreign investment in Pakistan’s regulated financial services sector. The new rule will benefit companies in capital markets, non-banking finance, insurance, and other regulated financial services sectors.

Previously, companies with foreign directors had to secure security clearance before submitting their licensing applications to SECP. This requirement often led to significant delays and was perceived by investors as an impediment to establishing regulated financial businesses in the country.

SECP Chairman Dr. Kabir Ahmed Sidhu stated that the revised framework balances investment facilitation with regulatory oversight. He noted that the measure will allow genuine investors to enter Pakistan’s regulated financial sector more efficiently while ensuring compliance with applicable laws and security requirements.