SECP approves first license under new Private Funds Regulations

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ISLAMABAD, Oct 18 (APP): The Securities and Exchange Commission of Pakistan (SECP) has approved first-ever application filed by an Non-Banking Finance Company (NBFC) under newly promulgated Private Funds Regulations, 2015, to undertake private equity and venture capital fund management services.

The license will allow the NBFC to launch private equity and venture capital funds (PE &VC funds) as well as alternative funds.

The license granted by the SECP is the first step for regulation of private pools of capital that are raised locally for deployment by various types of investment funds, according to press statement issued by the SECP.

It will facilitate the raise of funds from high net worth investors through several varieties of funds like private equity funds, infrastructure funds, hedge funds, debt funds etc.

As per the prevalent regulatory requirements, the PE&VC funds should be established in closed-end structure for investment in securities of unlisted company or a company listed on SME board or an unlisted company engaged in business of investing in developing a new product or process or desiring expansion of its business.

The alternative fund, on the other hand, should be established for investment in portfolio of securities and other financial assets.

These funds shall be regulated under the Private Fund Regulations, 2015, which has comprehensive features such as investment strategy, disclosure of periodic information to investors, valuation procedure, audit of fund etc. These comprehensive regulations will surely bring greater clarity to the market and will help in monitoring the unregulated funds and will encourage formation of new capital.