MICROCAPITAL BRIEF: Via Regulatory Sandbox, Securities and Exchange Commission of Pakistan Approves Digital, Crowdfunding, Robo-advisory, Shariah-compliant Proposals

The Securities and Exchange Commission of Pakistan (SECP), the regulator of non-bank financial institutions in the country, recently introduced a regulatory sandbox, inviting companies to propose pilot tests of novel services. It approved the following six: a digital insurance service that complies with Islamic law, a digital insurance broker, equity crowdfunding, a peer-to-peer lending solution, a robo-advisory service and a centralized platform for purchasing mutual funds. While equity crowdfunding is currently illegal in Pakistan, SECP will confer with Parliament regarding the possibility of changing this, depending on the outcome of the sandbox trial.

SECP was created by the Securities and Exchange Commission of Pakistan Act of 1997 and began operating as the regulatory board for the non-banking corporate sector and capital markets in 1999.

By Eha Joshi, Research Associate

Sources and Additional Resources

SECP press release
https://www.secp.gov.pk/wp-content/uploads/2020/01/Press-Release-Jan-21-SECP-opens-first-cohort-under-the-Regulatory-Sandbox.pdf

Dawn article on SECP Regulatory Sandbox
https://www.dawn.com/news/1595504

Medium article on SECP Regulatory Sandbox
https://medium.com/@mubarizsiddiqui/primer-on-secp-regulatory-sandbox-8a53d311ca29

SECP homepage
https://www.secp.gov.pk

SECP Regulatory Sandbox guidelines
https://www.secp.gov.pk/media-center/press-releases/secp-introduces-regulatory-sandbox-to-promote-innovation-in-financial-service-industry

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