The requirement for prior security clearance for foreign directors has been abolished

The requirement of prior security clearance of foreign directors for licensing applications has been removed.

SECP Chairman Kabir Sidhu said that now the processing of licensing applications will start on the basis of the directors’ affidavit. However, the appointment of foreign directors will continue to be subject to security clearance from the relevant authorities.

If the security clearance is rejected, the company will have to nominate a new director.

This new initiative will reduce delays in issuing licenses and increase business convenience. It is expected to promote foreign investment in capital markets, non-banking finance, insurance and other financial sectors.

Kabir Sidhu said that full implementation of domestic laws and security requirements will also be ensured.

This initiative strikes a balance between convenience for investors and effective regulatory oversight.