SECP Directs Companies Not to Receive Funds from Blacklisted INGOs

The Securities and Exchange Commission of Pakistan (SECP) has directed companies not to receive funding/foreign funding from black listed International NGOs (INGOs) or un-registered INGOs having operations in Pakistan.  The SECP on Monday issued a notification to propose amendments in the Companies Regulations, 2024. The revised regulations revealed that any company shall not receive funding/foreign funding from black listed International NGOs (INGOs) or INGOs having operations in Pakistan and not registered as INGOs in Pakistan.  Under revised regulations, the company shall mandatorily register with the respective Provincial Charities Commission and provide evidence of such registration within 6 months of incorporation. Existing companies must comply with this requirement within 1 year of promulgation.  The company shall maintain its website with the information specified in Annexure V of these Regulations. Where an existing entity is converted to a section 42 company, the existing trust or society must be dissolved within ninety days of the company’s incorporation. Evidence of the dissolution must be submitted to the Commission, along with an auditor’s certificate confirming the completion of the takeover process within ninety days of incorporation failing which license revocation process shall be initiated leading to strike off name of the company.  The CEO of large sized section 42 companies must be full time Employee. For section 42 companies classified as small the statutory auditor should be QCR rated; for medium and large Companies the auditor should be Audit oversight board (AOB) certified and in addition medium and large section 42 companies shall obtain PCP certification every three years. Intimation of the same to be provided to the commission within six months of the PCP certification date.  Approval of foreign directors/members shall only be granted upon receipt of prior security clearance from Ministry of interior, SECP added.