ISLAMABAD: In a major facilitation measure, the Securities and Exchange Commission of Pakistan (SECP) has allowed companies with foreign sponsors or directors to submit licensing applications based on a self-declaration undertaking, rather than obtaining prior security clearance for foreign directors from the relevant departments.

Under the revised framework, SECP will process licensing applications without requiring 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 director whose security clearance is denied will be replaced accordingly.

The measure is expected to reduce procedural delays, enhance regulatory certainty, and facilitate foreign investment in Pakistan’s regulated financial services sector. The revised framework will benefit companies operating in capital markets, non-banking finance, insurance, and other regulated financial services.

Previously, companies with foreign directors were required to obtain security clearance before submitting their licensing applications to SECP. The process is often lengthy and viewed by investors as a barrier to establishing regulated financial businesses in Pakistan.

Published in Dawn, June 9th, 2026