SECP to Ease Investor Eligibility Rules for Private Funds

The Securities and Exchange Commission of Pakistan (SECP) has announced significant reforms to the Private Fund Regulations, 2015, aiming to relax investor eligibility rules and broaden participation in Pakistan’s private fund market. Under the proposed changes, local and foreign individual investors, along with Qualified Institutional Buyers (QIBs), will now be eligible to invest in private funds.

The initiative is part of SECP’s strategy to strengthen Pakistan’s private equity and venture capital ecosystem while ensuring compliance with Shariah principles and global best practices.

The SECP recently published a consultation paper introducing major amendments to the Private Fund Regulations, 2015. This paper serves as the foundation for stakeholder discussions and is aimed at:

• Expanding the investor base to include foreign individual investors

• Relaxing financial eligibility criteria to make participation easier

• Introducing Qualified Institutional Buyers (QIBs) as a separate category

• Enhancing Shariah compliance for Islamic private funds

• Aligning Pakistan’s private fund framework with global investment trends

These reforms are expected to boost investor confidence, attract foreign direct investment (FDI), and support the growth of private equity and venture capital markets in Pakistan.

One of the most important reforms is the revised definition of “Eligible Investor.” Under the proposed framework, the following categories will now qualify:

• Local Individual Investors — Residents of Pakistan looking to invest in private funds

• Foreign Individual Investors — Non-residents gaining direct access to Pakistan’s investment opportunities

• Qualified Institutional Buyers (QIBs) — Institutional investors meeting SECP’s defined financial and operational thresholds

Previously, the regulations recognized only individuals as eligible investors. With this amendment, the SECP aims to diversify the investor base and encourage cross-border investments.

The SECP has also proposed easing the financial eligibility criteria for investing in private funds. Instead of requiring strict capital thresholds, the new rules introduce a net income-based requirement.

This change is designed to:

• Facilitate broader investor participation

• Encourage high-net-worth individuals and SMEs to invest

• Make private funds more accessible and inclusive

The Securities and Exchange Commission of Pakistan (SECP) has announced significant reforms to the Private Fund Regulations, 2015, aiming to relax investor eligibility rules and broaden participation in Pakistan’s private fund market. Under the proposed changes, local and foreign individual investors, along with Qualified Institutional Buyers (QIBs), will now be eligible to invest in private funds.

The initiative is part of SECP’s strategy to strengthen Pakistan’s private equity and venture capital ecosystem while ensuring compliance with Shariah principles and global best practices.

The SECP recently published a consultation paper introducing major amendments to the Private Fund Regulations, 2015. This paper serves as the foundation for stakeholder discussions and is aimed at:

• Expanding the investor base to include foreign individual investors

• Relaxing financial eligibility criteria to make participation easier

• Introducing Qualified Institutional Buyers (QIBs) as a separate category

• Enhancing Shariah compliance for Islamic private funds

• Aligning Pakistan’s private fund framework with global investment trends

These reforms are expected to boost investor confidence, attract foreign direct investment (FDI), and support the growth of private equity and venture capital markets in Pakistan.

One of the most important reforms is the revised definition of “Eligible Investor.” Under the proposed framework, the following categories will now qualify:

• Local Individual Investors — Residents of Pakistan looking to invest in private funds

• Foreign Individual Investors — Non-residents gaining direct access to Pakistan’s investment opportunities

• Qualified Institutional Buyers (QIBs) — Institutional investors meeting SECP’s defined financial and operational thresholds

Previously, the regulations recognized only individuals as eligible investors. With this amendment, the SECP aims to diversify the investor base and encourage cross-border investments.

The SECP has also proposed easing the financial eligibility criteria for investing in private funds. Instead of requiring strict capital thresholds, the new rules introduce a net income-based requirement.

This change is designed to:

• Facilitate broader investor participation

• Encourage high-net-worth individuals and SMEs to invest

• Make private funds more accessible and inclusive

As part of its inclusive policymaking approach, the SECP conducted a series of stakeholder consultation sessions in:

• Islamabad

• Lahore

• Karachi

These sessions included fund managers, legal experts, donor agencies, venture capitalists, and institutional investors. Discussions focused on global best practices, local challenges, and future investment opportunities in Pakistan.

The SECP’s reforms are expected to:

• Boost Foreign Direct Investment (FDI)

• Strengthen Pakistan’s venture capital and startup ecosystem

• Provide new financing opportunities for SMEs and startups

• Improve Pakistan’s global competitiveness in private equity markets

• Foster a transparent, inclusive, and investor-friendly regulatory framework

These reforms are a step towards modernizing Pakistan’s financial ecosystem. By opening doors to foreign investors and institutional buyers, the SECP is laying the foundation for a vibrant private equity market.