The Securities and Exchange Commission of Pakistan (SECP) has granted approval to the first technology-based crowdfunding platform for the commencement of live testing and experimentation under the first cohort of its technology-driven initiative – Regulatory Sandbox.
The crowdfunding platform is an online digital platform that allows startups and Small and Medium enterprises to fund their capital requirement from investors in return for securities.
Crowd Funding Platform will conduct requisite due diligence on the behalf of the investors and only eligible issuers that meets certain threshold criteria would be allowed to pitch the issue through the crowdfunding platform and raise funds from investors.
The applicant will be allowed to operate in a controlled environment for a period of up to six months, in accordance with the conditions and limitations imposed as part of the approval.
During the testing period, applicants will be able to test their business model in a live environment under the direct supervision of SECP.
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 crowdfunding platforms in Pakistan.
