The Securities and Exchange Commission of Pakistan (SECP) has introduced a major regulatory change aimed at simplifying the licensing process for foreign-sponsored companies, a move expected to reduce delays and improve the country’s investment environment.
Under the revised framework, companies with foreign sponsors will no longer be required to obtain prior security clearance for foreign directors before their licensing applications can be processed. Instead, the SECP will begin processing license applications based on affidavits submitted by the directors.
The regulator clarified that while the licensing process has been streamlined, the appointment of foreign directors will continue to remain subject to security clearance from the relevant authorities. If security clearance is denied, the company will be required to nominate a replacement director to remain compliant with regulatory requirements.
According to the SECP, the previous requirement often resulted in lengthy delays because security clearance procedures could take considerable time to complete. The revised approach is expected to shorten licensing timelines and improve ease of doing business for foreign investors seeking to establish operations in Pakistan.
The measure is likely to benefit companies operating in capital markets, non-banking finance, insurance, and other regulated financial sectors where foreign investment plays an important role in growth and innovation.
SECP Chairman Akif Saeed said the initiative strikes a balance between facilitating investment and maintaining effective regulatory oversight. He added that while the process has been simplified, compliance with national laws and security requirements will continue to be fully enforced.
The regulator believes the move will improve investor confidence by removing a significant administrative hurdle while ensuring that appropriate safeguards remain in place. The change forms part of broader efforts to attract foreign investment and strengthen Pakistan’s financial sector through more efficient regulatory processes.
