The Securities and Exchange Commission of Pakistan (SECP) is looking to open the country’s private fund market to a wider pool of investors, including individuals and foreign participants, in a move aimed at spurring growth in private equity and venture capital.
Wider Investor Access
Under proposals outlined in a July 2025 consultation paper, the regulator plans to broaden the definition of “eligible investor” to cover both local and foreign individuals, while also introducing the category of “Qualified Institutional Buyer” for larger, professional investors.
Currently, private funds are mostly limited to institutional players and high-net-worth individuals. By easing financial thresholds—adding a net income requirement instead of solely relying on net worth—the SECP hopes to make participation more accessible and attract fresh capital into Pakistan’s nascent private investment ecosystem.
Shariah-Compliant Growth Driving Reforms
The review comes amid a growing appetite for Shariah-compliant investment vehicles in Pakistan. The SECP says the new rules will align private funds more closely with its recently introduced Shariah governance framework, ensuring stronger compliance with Islamic finance principles.
Industry Engagement Before Implementation
To build consensus, the regulator has been conducting a series of stakeholder meetings across major cities. Sessions were held in Islamabad (July 30), Lahore (August 18), and Karachi (August 27), bringing together fund managers, legal experts, donor agencies, and other industry participants.
These discussions followed the July release of the consultation paper, which lays out plans for a clearer classification of private funds, better governance standards, and closer alignment with international best practices.
Why It Matters
Pakistan’s private capital market remains relatively small compared to regional peers. By lowering barriers for qualified individuals and foreign investors, the SECP aims to attract more venture funding and private equity activity, which could provide much-needed financing for startups and mid-sized enterprises in a challenging economic environment.
If approved, these amendments would mark the first major update to the Private Fund Regulations since their introduction in 2015.
