The Securities and Exchange Commission of Pakistan (SECP) is moving to broaden participation in the country’s private fund industry, signaling an important step toward aligning Pakistan’s capital markets with international practices. In a recently issued consultation paper, the regulator has proposed key amendments to the Private Fund Regulations, 2015, aimed at easing investor eligibility rules and encouraging greater market participation from both local and international players.
Under the new proposals, the definition of “Eligible Investor” will be expanded beyond its current scope to include both local and foreign individual investors. This marks a significant departure from the existing regulations, which primarily recognize institutional investors and limit retail-level participation. By introducing relaxed financial resource requirements and creating a new category called “Qualified Institutional Buyer,” SECP intends to make private funds more accessible while still ensuring a structured governance framework.
A major area of focus in the proposed amendments is the increasing demand for Shariah-compliant investment products. Given the rising preference for Islamic finance instruments, the SECP is reviewing the private fund regime to strengthen its alignment with Shariah principles. The move builds on the regulator’s recently introduced Shariah governance framework and aims to enhance credibility, transparency, and investor confidence in the growing Islamic finance ecosystem.
To ensure a participatory approach, the SECP has held stakeholder consultation sessions across three major cities. The first was organized in Islamabad on July 30, followed by sessions in Lahore on August 18 and Karachi on August 27, 2025. These gatherings brought together industry representatives, fund managers, multilateral donor agencies, legal experts, and other stakeholders. The consultations were designed not only to gather industry feedback but also to raise awareness of the proposed changes and encourage collaborative policy design.
The regulator’s consultation paper, released in July 2025, outlines several significant revisions to the regulatory landscape. Among these are the expansion of investor categories, clear definitions for different subtypes of private funds, and updated governance structures designed to strengthen oversight. The paper also proposes easing eligibility criteria by introducing net income requirements, thereby opening participation to a wider base of investors without undermining risk controls.
Market observers suggest that the proposed amendments are well-timed. Pakistan’s private equity and venture capital space is growing steadily, with increased interest from international investors, particularly in sectors such as technology, fintech, infrastructure, and renewable energy. By relaxing entry requirements and defining clear regulatory subtypes, SECP hopes to create a more transparent and globally aligned investment environment capable of attracting both domestic capital and foreign inflows.
The regulator has emphasized that the ongoing review process reflects its broader policy approach of inclusivity and transparency. Rather than imposing top-down rules, SECP is engaging with stakeholders to ensure that regulations address practical challenges while meeting international benchmarks. Industry participants see this as a positive signal, as the updated framework could create new fundraising opportunities for startups, expand the availability of risk capital, and deepen the country’s investment ecosystem.
While the proposed revisions are still under consultation, they represent a critical evolution in Pakistan’s financial sector. By opening the private fund market to a wider pool of investors and embedding Shariah-compliant structures more firmly into the framework, SECP is laying the groundwork for a more diversified, resilient, and globally competitive capital market.