SECP introduces unified framework for 'faster and easier' entry into Pakistan's capital market

The Securities and Exchange Commission of Pakistan (SECP) has introduced a new framework to streamline the process of entering Pakistan's capital market, making it "faster and easier" for investors. The digital investor onboarding system aims to reduce redundant verification, simplify documentation, and establish clear timelines for account opening. This initiative primarily targets first-time and digital investors, promising a one-working-day turnaround for Sehl/Sahulat accounts and two working days for normal accounts.

SECP Chairman Dr Kabir Ahmed Sidhu emphasized that the aim is to remove entry barriers and utilize technology to simplify, expedite, and enhance the accessibility of the investor journey. The unified framework harmonizes onboarding requirements for securities brokers, asset management companies, insurers, and other regulated intermediaries, thereby ensuring a uniform investor experience throughout the regulated financial sector.

A notable aspect of the framework is the elimination of repetitive customer verification. If an eligible regulated financial institution or notified third party has already completed the necessary verification, intermediaries can rely on this verification, thereby avoiding the need for investors to repeat the process. Additionally, the framework supports API-based straight-through processing and digital onboarding, including instant UIN issuance and the opening of CDC sub-accounts.

This move comes in the wake of the Pakistan government's establishment of the Capital Market Development Fund (CMDF), which aims to promote financial literacy, expand financial inclusion, and increase retail investor participation in the capital markets across the country.