The Securities and Exchange Commission (SECP) has removed the requirement for prior security clearance for foreign directors during the company licensing application stage.
SECP announced that licensing applications will now be processed on the basis of affidavits submitted by directors, eliminating pre-clearance as a condition for issuing licences.
Foreign directors will still require security clearance from relevant authorities following appointment. Companies must nominate a replacement director if clearance is subsequently denied.
The regulator said the reform will significantly shorten licensing timelines across capital markets, non-banking finance, insurance, and other financial services sectors.
The SECP identified the security clearance process as a longstanding obstacle for investors, citing the time required for approvals as a key barrier to entry.
SECP Chairman Kabir Sadhu said the measure balances investor facilitation with effective regulatory oversight, adding that full compliance with national laws and security requirements would continue to be maintained.
