Securities Exchange Commission of Pakistan (SECP) has granted approval to the first technology based crowd funding platform for commencement of live testing under first cohort of Regulatory Sandbox.
SECP said this crowd funding is a digital platform that allows startups and small and medium enterprises (SMEs) to raise funds from investors in return for securities.
It is pertinent to note that this approved crowd funding platform would conduct requisite due diligence on behalf of investors so that only eligible issuers, meeting threshold criteria, pitch the issue through the crowd funding platform and raise funds from investors.
Securities Exchange Commission of Pakistani said: “The Crowd Funding business model will be operated or tested in a live controlled environment under the supervision of SECP for 6 months. The applicant company has to follow the conditions entwined with the approval.”
“At the end of the testing period, the said applicant shall submit a comprehensive report to the Commission on the fund-raising activities carried out through the platform, which will then determine the future course of action for regulating crowd funding platforms in Pakistan,” SECP said.
President of Pakistan Software Houses Association (P@SHA), Jehan Ara praised his initiative and said, “This is wonderful news from SECP and could result in lots of innovation happening through crowdfunding. Kudos SECP. I hope this goes beyond this cohort.”