SECP aims to align private fund regulations with global standards
The Securities and Exchange Commission of Pakistan (SECP) has wrapped up a three-city round of stakeholder consultations on proposed amendments to the Private Fund Regulations, 2015, a package the regulator says is intended to modernize oversight of private equity and venture capital under a more structured, globally aligned “private fund” framework. The sessions—held in Islamabad on July 30, followed by Lahore on August 18 and Karachi on August 27—were designed to explain the draft changes and solicit practical input from market participants before the text is finalized.
The outreach follows SECP’s late-July publication of a consultation paper and companion press notice inviting comments on the proposed rule set. In those materials, SECP flagged headline shifts including consolidation of private equity and venture capital under a unified “Private Fund” category with clearly defined sub-types, expanded investor eligibility (including income-based thresholds and clearer treatment of Qualified Institutional Buyers), and governance enhancements aimed at stronger investor protection and clearer fiduciary accountability at fund manager level.
According to SECP’s public guidance, the Private Fund Regulations, 2015 underpin licensing and operations of Private Fund Management Companies (PFMCs) and their funds, alongside the Non-Banking Finance Companies (NBFC) framework. The proposed refresh is part of a broader 2025 regulatory pipeline that also includes updates to public offering regulations and research analyst rules, reflecting the commission’s push to modernize capital-market oversight across the board.
The commission’s current move builds on earlier refinements to the private-fund rulebook. For example, 2020 amendments removed the Rs 3 million minimum initial offer threshold and increased the cap on eligible non-institutional investors per fund from 30 to 50—measures meant to broaden participation while keeping offerings restricted to sophisticated profiles.
Market participants say the consolidation of categories could reduce ambiguity that has long complicated product formation and cross-border fundraising. At present, PFMC licensing sits within the NBFC regime and references the Private Fund Regulations, 2015; clearer taxonomy and eligibility rules could, in practice, shorten time-to-market for new vehicles and simplify disclosures to limited partners who benchmark terms against regional norms.
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The consultation sessions drew fund managers, legal advisers, industry associations, and multilateral partners, mirroring the commission’s recent habit of pairing technical drafting with hands-on roadshows. Press coverage at the end of July previewed Islamabad’s kick-off and noted that follow-up sessions would reach Lahore and Karachi to broaden the feedback net. That approach tracks with SECP’s other capital-market initiatives this month, from public-offering rule updates to mutual-fund reforms, as the regulator emphasizes iterative engagement over one-and-done notifications.
Why it matters: Pakistan’s private-capital ecosystem
is still scaling, and regulatory clarity shapes whether local PFMCs and their funds can attract institutional checks—especially from development finance institutions and regional family offices—without bespoke side-letter workarounds. Internationally recognizable sub-types and standardized investor gates can reduce friction in mandate approvals, while stronger governance provisions, if calibrated well, can reinforce limited-partner confidence without imposing public-fund style costs.
Historically, the Private Fund Regulations, 2015 have been updated in steps rather than wholesale rewrites. The 2020 round primarily tuned thresholds and eligibility. The current consultation, by contrast, signals a structural re-frame that should, if adopted, give PFMCs brighter lines on what they may offer to whom, and on the board-level and compliance scaffolding that SECP will expect to see across fund lifecycles.
There is also a timing dimension. Initial press notices in late July referenced an August 12 window for public comments, a conventional two-week runway from release. Stakeholders should send their views to the SECP, with the current official channel for submissions listed as muhammad.hammad@secp.gov.pk
When the rule text is finalized, the downstream questions will include transition mechanics for existing funds, grandfathering for vehicles mid-raise, and the interplay with NBFC licensing conditions. PFMCs will also need to assess marketing materials and offering documents against any new sub-type definitions and investor-eligibility tests to avoid re-papering under time pressure.
The SECP is promoting comments via its Drafts for Discussion portal; stakeholders should track the “Public Comments on Drafts” page for notifications that move the process from consultation to promulgation.
SECP says the goal is a private-fund regime that is easier to navigate, better aligned with international practice, and more protective of sophisticated investors without importing public-fund burdens. With consultations now complete in Islamabad, Lahore and Karachi, the regulator will sift the feedback and move toward a notified draft of the Private Fund Regulations, 2015 that can support a deeper private-capital market in Pakistan.
