SECP Plans to Relax Investor Eligibility Rules for Private Funds

The Securities and Exchange Commission of Pakistan (SECP) has announced plans to revise the Private Fund Regulations, 2015, in order to align with the changing dynamics of the country’s private fund industry.

Under the new proposals, eligibility for private funds will be expanded to include both local and foreign individual investors. The SECP also intends to introduce the category of “Qualified Institutional Buyer”, easing financial resource requirements and enabling wider participation.

Key Highlights of the Proposal:

• Expansion of the term “Eligible Investor” to cover individuals (local & foreign).

• Relaxed criteria with net income requirements instead of strict financial thresholds.

• Clearer classification between individual investors and Qualified Institutional Buyers.

• Stronger integration of Shariah-compliant fund structures in line with the SECP’s updated Shariah governance framework.

The SECP has already held stakeholder consultation sessions in Islamabad, Lahore, and Karachi during July and August 2025. These sessions brought together fund managers, industry experts, donor agencies, and legal advisors to provide feedback and foster collaboration.

The regulator’s consultation paper, published in July 2025, outlines proposals such as:

• Defined sub-categories of private funds.

• Broader investor participation opportunities.

• Improved governance standards aligned with global best practices.

These reforms are aimed at strengthening Pakistan’s private equity and venture capital ecosystem, ensuring regulatory clarity, and boosting investor confidence.