Fit and proper assessment usually sounds like a broad, discretionary judgement call. For three specific categories of person, PVARA’s NOC Regulations do not leave it to discretion at all — they state a flat bar.
This piece sets out the three automatic disqualifiers in Regulation 6.3 of the No Objection Certificate Regulations 2025, the single exception written into the third one, and how this hard bar sits alongside the broader, more judgement-based fit and proper standard around it.
What are the three automatic disqualifiers for a Key Individual under PVARA’s NOC Regulations?
Regulation 6.3 provides that no individual may serve as a Key Individual of an NOC applicant if they fall into any of three categories: a relevant criminal conviction, a prior regulatory sanction, or ongoing bankruptcy or insolvency proceedings. Unlike the general fit and proper standard, these three grounds are stated as an absolute bar rather than a factor to be weighed.
“6.3 No individual may serve as a Key Individual if he or she: (a) has been convicted of an offence under the Anti-Money Laundering Act, 2010 (‘AMLA 2010’), the Act, or any law involving dishonesty, fraud or financial misconduct; (b) has been sanctioned by any regulatory body in Pakistan or abroad; and / or (c) is subject to bankruptcy or insolvency proceedings, except where duly discharged.”
| Ground | Regulation 6.3 reference | Scope |
|---|---|---|
| Relevant criminal conviction | (a) | AMLA 2010, the Virtual Assets Act, or any law involving dishonesty, fraud or financial misconduct |
| Regulatory sanction | (b) | Any regulatory body, in Pakistan or abroad |
| Bankruptcy or insolvency | (c) | Ongoing proceedings, unless duly discharged |
What kind of criminal conviction triggers disqualification under ground (a)?
Regulation 6.3(a) is not limited to money-laundering-specific offences. It reaches three separate categories: conviction under the Anti-Money Laundering Act 2010, conviction under the Virtual Assets Act itself, or conviction under “any law involving dishonesty, fraud or financial misconduct.” That third category is drafted broadly enough to potentially capture convictions unrelated to financial services specifically, so long as dishonesty, fraud or financial misconduct is the character of the offence.
The Regulations do not further define “financial misconduct,” and do not state whether a conviction outside Pakistan under a foreign equivalent law counts — though Regulation 6.3(b)’s explicit reference to sanctions “in Pakistan or abroad” suggests the Regulations generally contemplate cross-border relevance for these disqualifiers. Where the source documents leave this unclear, applicants with a Key Individual who has a foreign conviction of this character should disclose it and let PVARA make the determination, rather than assume a foreign conviction falls outside Regulation 6.3(a).
What counts as a “sanction by any regulatory body” under ground (b)?
Regulation 6.3(b) disqualifies anyone “sanctioned by any regulatory body in Pakistan or abroad.” The provision does not distinguish between a serious enforcement sanction and a minor administrative one, and does not set a materiality threshold or a time limit on how far back a sanction counts.
Form A3, the Fit & Proper Questionnaire that every Key Individual must complete, asks in Section 4 whether the individual has ever been “subject to enforcement action by any regulator,” “issued a warning, reprimand, or supervisory restriction,” or “removed or suspended from a position by a regulator.” Reading Regulation 6.3(b) alongside those Form A3 questions, our interpretation is that the bar is intended to be read broadly — any of those categories of prior regulatory action is a fact PVARA expects disclosed, and the applicant should not attempt to characterise a lesser sanction as falling outside Regulation 6.3(b) without confirming that view with the Authority first.
What is the “duly discharged” exception under ground (c), and how does it work?
Regulation 6.3(c) disqualifies anyone “subject to bankruptcy or insolvency proceedings,” but carves out an exception “except where duly discharged.” This is the only one of the three grounds that includes a built-in escape route — a person who was previously bankrupt or insolvent, but has since been formally discharged from those proceedings, is not automatically barred under this provision.
The Regulations do not define what evidence establishes that a discharge is “duly” completed, or specify a required form of proof — a discharge certificate, a court order, or some other document. Form A3, Section 6 asks whether the individual has ever “been declared bankrupt or insolvent” or “entered into a debt restructuring or insolvency arrangement,” and requires that “if Yes to any, provide full details, including amounts, dates, circumstances and supporting documents.” In practice, an individual relying on the discharge exception should expect to submit documentary evidence of the discharge alongside their Form A3 disclosure, since the bare fact of a past insolvency, without evidence that it was properly closed out, appears on the face of Regulation 6.3(c) to leave the disqualification in place.
How do these three automatic disqualifiers relate to the general fit and proper standard?
Regulation 6.1 sets the general standard: all Key Individuals must satisfy “Fit and Proper standards of integrity, competence, financial soundness and experience, as prescribed by section 16 of the Act.” That is a broader, more evaluative standard than Regulation 6.3 — competence and experience, for example, are judged on their merits rather than triggering an automatic bar. Regulation 6.3’s three grounds sit inside that wider standard as hard-edged exceptions: where any of the three applies, PVARA does not need to weigh the individual’s overall suitability at all, because the Regulation removes the discretion entirely.
Regulation 6.2 gives PVARA the separate power to “conduct interviews with Key Individuals to satisfy itself of their competence, independence, knowledge and suitability for the role” — a tool aimed at the evaluative side of fit and proper, not at the automatic disqualifiers, which by definition do not require an interview to establish. Each Key Individual must also submit a signed Fit and Proper Declaration under Regulation 6.4, using Form A3.
What happens if a Key Individual becomes disqualified after appointment?
The fit and proper standard is continuing, not a one-time check at appointment. Section 20(4) of the Virtual Assets Act 2026 requires that “fit-and-proper criteria shall be continuing in nature, and any person subject to such criteria shall notify the Authority of any matter that may affect their fitness and propriety.” Regulation 19.1(c) of the NOC Regulations lists “any Key Individual ceases to satisfy Fit and Proper requirements” as a ground on which PVARA may revoke the applicant’s NOC, including its AML registration status.
In practice, this means a Key Individual who is convicted of a disqualifying offence, sanctioned by a regulator, or who enters bankruptcy proceedings after the NOC has already been granted does not simply carry on in role until the next renewal cycle. Form A8, the Key Individual Appointment/Change Form, exists precisely to capture this kind of change — it must be submitted for “Resignation/Removal” as one of its listed change types — and the applicant is expected to notify PVARA and act on the change without waiting to be asked.
Related reading
- PVARA Exchange License: Capital, Rules & Obligations 2026
- PVARA Transfer & Settlement License: Crypto Payments 2026
- The PVARA Licensing Gold Rush: Pakistan’s Crypto Frontier
- PVARA Custody License: Safeguard Customer Crypto 2026
- PVARA Management & Investment License: Crypto Funds 2026
About this analysis
This analysis was prepared by the CoinConnect research desk from the PVARA No Objection Certificate Regulations 2025 — principally Regulations 6.1 through 6.4 and 19.1(c), and Forms A3 and A8 in Annex A — read alongside Section 20(4) of the Virtual Assets Act 2026, as published.
Regulatory positions change and specific requirements should be verified against the current position published by the relevant authority before you act on them. This is information and analysis, not legal advice, and it does not create an advisory relationship. Take professional advice on your own circumstances.
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