SECP Relaxes Foreign Sponsorship Licensing Requirements

June 08, 2026 (MLN): The Securities and Exchange Commission of Pakistan (SECP) has simplified the licensing process for companies with foreign sponsors.

The requirement of prior security clearance for foreign directors has been removed for licensing applications, the SECP said.

Licensing applications will now be processed based on affidavits submitted by directors.

However, the appointment of foreign directors will remain subject to security clearance from relevant authorities, as per press release issued.

In case security clearance is rejected, the company will be required to nominate a new director.

The move is expected to reduce delays in license issuance and improve business facilitation.

It is also aimed at promoting foreign investment in capital markets, non‑banking finance, insurance and other financial sectors.

Security clearance was previously a time‑consuming process and a major hurdle for investors.

“This step balances investor facilitation with effective regulatory oversight,” SECP Chairman Kabir Sidhu said.

He added that full compliance with local laws and security requirements will be ensured.

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