SECP proposes new law to unlock funding for startups

The Securities and Exchange Commission of Pakistan (SECP) has shared the draft Venture Capital (VC) Bill with the Board of Investment (BoI) for public consultation, according to a SECP statement on Monday.

The proposed law aims to increase access to risk capital, attract domestic and foreign investment, support startup growth, create jobs and contribute to economic growth.

“The bill has been prepared under a federal government initiative that tasked SECP to develop a bespoke, standalone regulatory framework for venture capital and improve funding access for startups and high-growth businesses.

“Despite strong potential, Pakistan’s startup, technology and innovation sectors have limited access to formal venture capital, with much of the investment activity structured offshore or outside the domestic regulatory framework,” the SECP said.

The Commission further said the proposed bill sought to address that gap through “a simple and transparent framework” for venture capital funds and fund managers.

“It provides for light-touch licensing and registration, simplified operational structures, and clear governance and reporting standards, while facilitating the formalisation of venture capital activity in Pakistan.”

SECP chariman Dr Kabir Ahmed Sidhu said the proposed law would help channel private capital into Pakistan’s emerging businesses.

“The bill recognises the high-risk and innovation-driven nature of venture capital and seeks to reduce regulatory barriers while ensuring effective governance and investor protection,” he was quoted as saying in the SECP statement.

As the next step, SECP and BoI will hold public consultations with key stakeholders, including startups, fund managers, legal and financial experts, the State Bank of Pakistan, Pakistan Stock Exchange and relevant industry associations, before the draft proceeds through the legislative process.