Key Points
- Prior security clearance for foreign directors removed at application stage
- Licensing now proceeds on affidavit-based declarations
- Security clearance continues in parallel with post-approval enforcement
ISLAMABAD: Pakistan’s corporate regulator, the Securities and Exchange Commission of Pakistan (SECP), has simplified the licensing process for foreign-sponsored companies, according to an official statement issued on Monday.
By removing the requirement for prior security clearance of foreign directors at the application stage, the Commission’s move is aimed at reducing delays in regulatory approvals.
Under the revised framework, companies seeking licences in regulated sectors will no longer be required to obtain security clearance for foreign directors before submitting applications.
Instead, applicants will proceed on the basis of sworn affidavits, allowing licensing processes to move forward without procedural delays.
The country’s corporate watchdog clarified that security clearance for foreign directors remains mandatory but will now be processed in parallel with licensing decisions.
In cases where clearance is later denied, companies will be required to replace the concerned director to maintain compliance with regulatory requirements.
Officials said the change is intended to reduce bottlenecks in sectors such as capital markets, non-banking financial services, insurance, and other regulated industries. According to the Commission, in certain cases approval timelines have often been cited as a constraint for foreign participation.
The regulator described the reform as part of efforts to improve the ease of doing business while maintaining regulatory oversight and safeguards for sensitive appointments.
In recent years, the SECP has introduced multiple measures to streamline incorporation and compliance processes, including consolidated regulatory frameworks designed to standardise procedures for both local and foreign companies.
