Islamabad: The Securities and Exchange Commission of Pakistan (SECP) has taken strict measures to prevent companies from accepting funding from blacklisted or unregistered international non-governmental organizations (INGOs) operating within Pakistan.
In a notification issued on Monday, the Securities and Exchange Commission of Pakistan proposed amendments to the Companies Regulations 2024, emphasizing that companies should not receive funding from blacklisted international NGOs or those that do not have proper registration in Pakistan.
Under the revised regulations, newly established companies must register with their regional Charities Commission and provide proof of registration within six months. Existing companies must comply with it within one year of the issuance of the regulation.
Furthermore, companies must maintain a website containing the information specified in Appendix V of the Regulations. For existing entities that transition to a Section 42 corporation, the trust or associated community must be dissolved within 90 days of incorporation, with proof of dissolution and an auditor’s certification filed with the SEC. Failure to comply will result in a license revocation process, which may result in cancellation of the company’s registration.
Key changes for Section 42 companies include requirements for large entities to employ a full-time CEO. Small companies must under Section 42 appoint a chartered auditor with a Quality Control Review (QCR) rating, while medium and large companies must appoint auditors approved by the Audit Oversight Board (AOB). In addition, medium and large companies are required to obtain Pakistan Center for Philanthropy (PCP) certification every three years and report to the Securities and Exchange Commission of Pakistan within six months of obtaining the certification.
The Securities and Exchange Commission also stipulated that the approval of foreign directors or members will not be granted except after obtaining a security clearance from the Ministry of Interior.
These regulatory changes aim to enhance transparency, ensure compliance, and maintain the integrity of the corporate and charitable sectors in Pakistan.