By Adnan Rafique
ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has granted approval to the first technology-based crowd funding platform for commencement of live testing and experimentation under first cohort of its technology driven initiative – Regulatory Sandbox.
Crowd funding platform is an online digital platform that allows startups and Small and Medium Enterprises (SMEs) to fund their capital requirement from investors in return for securities. Crowd Funding Platform would 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 crowd funding 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, applicant will be able to test its 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 crowd funding platforms in Pakistan.
