Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • SBP, SECP revise ToRs for joint task force

    SBP, SECP revise ToRs for joint task force

    KARACHI: The State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) have amended the Terms of Reference (ToRs) of their Joint Task Force (JTF) on Financial Conglomerates to further strengthen the  supervisory cooperation, inter alia, in AML/CFT/CPF supervision at financial-group level. Dr, Reza Baqir, Governor, SBP and Aamir Khan, Chairman, SECP have signed the Letter of Understanding (LoU) for amendments in the ToRs, according to a statement issued on Thursday.

    The interagency cooperation between financial sector regulators is a crucial element for the effective supervision of financial groups, which comprise various types of financial institutions.

    Accordingly, the SBP and SECP established the JTF in March 2009 to proactively identify and tackle the risks posed by conglomeration in the financial sector.

    The ToRs of the JTF envisage the supervisory cooperation, holding periodic meetings and information sharing between both the regulators in respect of the financial groups. The ToRs have been revised from time to time to align with the developments in the regulatory sphere and dynamics of the financial market.

    Keeping in view the importance of the group-level AML/CFT/CPF supervision, both SBP and SECP jointly agreed to specifically cover this area in the ToRs of the JTF in a more explicit manner.

    These improvements in the ToRs will allow the regulators to effectively implement group-level AML/CFT/CPF supervision in line with the international standards, and strengthen cooperation and information sharing in a more systematic manner. Revised TORs will further the overall policy objectives of soundness, integrity and fair conduct in the financial system.

  • FBR expands operations against Benami assets to four major cities

    FBR expands operations against Benami assets to four major cities

    The Federal Board of Revenue (FBR) has decided to expand its operations by establishing Anti-Benami Zones in four major cities across the country.

    (more…)
  • Customs intelligence Karachi announces auction of confiscated vehicles on April 23

    Customs intelligence Karachi announces auction of confiscated vehicles on April 23

    KARACHI: The Directorate of Intelligence and Investigation, Customs, Karachi has announced a public auction of confiscated vehicles, scheduled to take place on April 23, 2021.

    (more…)
  • SECP’s guidelines for convertible debt securities

    SECP’s guidelines for convertible debt securities

    ISLAMABAD: Securities and Exchange Commission (SECP) on Wednesday notified guidelines for issuance of convertible debt securities in Pakistan through both private placement and public offering mode.

    The SECP issued the following guidelines:

    Steps involved in Private Placement:

    i. Requisite approval under section 83 of the Companies Act, 2017 for further issue of share capital in relation to Issuance of CDS. (Since conversion of CDS into shares would enhance the share capital of the Company, therefore approval of section 83 (1) b is required, whereby a public Limited company can enhance share capital by the way of other than right offer through special resolution and Commission’s approval.

    ii. Structuring of CDS as per the Structuring of Debt Securities Regulations, 2020. As per the said Regulations, the Issuer can issue the CDS either through execution of Issuance agreement or Trust Deed. Provisions relating to Trust Deed and Issuance agreement are specified at regulation 11 and 15 of the Structuring of Debt Securities Regulations, 2020, respectively.

    iii. Appointment of Investment agent or Debt Securities Trustee depending upon the structure opted by the Issuer. (Investment agent is required in case of Issuance agreement and Debt Securities Trustee in case of Trust structure.)

    Entity holding a valid Consultant to the Issue license can act as Investment Agent, list of licensed Consultant to the Issue and Debt Securities Trustee is available at SECP’s website and can be accessed through:

    https://www.secp.gov.pk/data-and-statistics/capital-markets/

    iv. Drafting of Information memorandum by the Issuer for private placement. (Content of Information memorandum is prescribed in the Private Placement Rules, 2017)

    v. After complying with aforesaid requirements, Issuer can directly place convertible debt securities to the eligible investors as per Private Placement Rules, 2017. Only eligible investors can invest in privately placed convertible debt securities. (Eligible investors are specified by Commission vide SRO dated April 19, 2021 under section 66 of the Companies Act, 2017).

    vi. No regulatory approval is required for placement of CDS. (Since, the issue is privately placed and general public is not involved, therefore PSX and SECP approval is not required)

    vii. After placement, Issuer can list the CDS at Pakistan Stock Exchange as per Chapter 5C of the PSX Rule Book. (Listing requirements are specified in Chapter 5C).

    viii. Subsequent to listing, only eligible investors notified by the Commission can invest in these securities in secondary debt market.

    ix. Secondary market trading of privately placed listed debt securities is visible at BNB trading board of PSX and can be accessed through:

    https://dps.psx.com.pk/trading-panel

    Steps involved in Public Offering:

    i. Appointment of Consultant to the Issue (CTI), Underwriter(s) and Shareregsitar by the Issuer as per Public Offering Regulations, 2017.

    List of licensed Consultant to the Issue, Underwriters and Share Registrars is available at SECP’s website and can be accessed through:

    https://www.secp.gov.pk/data-and-statistics/capital-markets/

    (Role of Consultant to the Issue is to (i) draft listing application, prospectus and related documents; (ii) seek approval of PSX and SECP on the behalf of the Issuer; (iii) ensure publication of prospectus in accordance with relevant law; (iv)conduct roadshows to sell the issue; (v) guide issuer throughout the public offering process etc.

    (Role of Underwriter: Underwriter provides commitment to subscribe the unsubscribed portion of the issue. Underwriting helps the Issuer to get desired amount of the funds required for the implementation of the Project, which the Issuer would not be able to get in case of undersubscription of securities. Moreover, underwriting provide confidence to the investors that an independent third party has conducted proper due- diligence of the issue including the price before underwriting the issue.)

    ii. Structuring of CDS as per the Structuring of Debt Securities Regulations, 2020. As per the said Regulations, the Issuer can issue the CDS either through execution of Issuance agreement or Trust Deed. Provisions relating to Trust Deed and Issuance agreement are specified at regulation 11 and 15 of the Structuring of Debt Securities Regulations, 2020, respectively.

    iii. Appointment of Investment agent or Debt Securities Trustee depending upon the structure opted by the Issuer. (Investment agent is required in case of Issuance agreement and Debt Securities Trustee in case of Trust structure.)

    Entity holding a valid Consultant to the Issue license can act as Investment Agent, list of licensed Consultant to the Issue and Debt Securities Trustee is available at SECP’s website and can be accessed through:

    https://www.secp.gov.pk/data-and-statistics/capital-markets/

    iv. Preparation of Prospectus and listing documents by the CTI. (Content of Prospectus is prescribed in First Schedule of the Public Offering Regulations, 2017)

    v. Submission of listing documents along with the prospectus to the PSX for approval. (Listing documents are specified at Annexure -I of Chapter 5B of the PSX rule book) PSX rule book can be accessed through:

    https://www.psx.com.pk/psx/themes/psx/uploads/PSX_Rulebook_%28updated_on_March_31%2C_2021%29.pdf

    vi. Approval under section 83 of the Companies Act, 2017 for further issue of share capital. Since Conversion of CDS into shares would enhance the share capital of the Company, therefore approval of section 83 (1) b is required, whereby a public Limited company can enhance share capital by the way of other than right offer through special resolution and Commission’s approval. (It is advisable to obtain approval(s) after structuring of the CDS, however approval can be obtained before placement)

    vii. Placement of prospectus by PSX on its website for seeking public comments. (seven working days)

    viii. Pursuant to PSX approval, submission of prospectus to the Commission for approval under section 87 (2) read with section 88(1) of the Securities Act, 2015.

    ix. Subsequent to Commission approval, seeking dates from PSX for publication of prospectus and public subscription. (To save cost, abridged version of prospectus can be published)

    x. Prospectus has to be published in at least one English Newspaper and Urdu version of the prospectus in at least one Urdu Newspaper.

    xi. Prospectus has to be published not less than seven days and not more than thirty days before the commencement of the subscription period.

    xii. Publication of prospectus after obtaining dates from PSX.

    xiii. Placement of CDS to the general public during the public subscription period.

    xiv. Listing of CDS at Pakistan Stock Exchange as per Chapter 5B of the PSX Rule book (Listing requirements are specified in Chapter 5B).

    xv. Subsequent to listing, general public including both institutional and individual investors can invest in these securities in secondary debt market.

    xvi. Secondary market trading of publicly listed debt securities is visible at BNB trading board of PSX and can be accessed through:

    https://dps.psx.com.pk/trading-panel

  • Stock market ends down by 93 points in narrow range trading

    Stock market ends down by 93 points in narrow range trading

    KARACHI: The stock market ended down by 93 points on Wednesday while trading in a narrow range during the day. The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 45,307 points as against previous day’s closing of 45,400 points, showing a decline of 93 points.

    Analysts at Arif Habib Limited said that the market traded in a narrow range today between -174 points and +227 points, closing the session -93 points.

    Investors already appeared somewhat despondent of the financial results and indifference of pertinent stocks to those results, NCOC’s hint towards lock down of major cities added fuel to fire.

    Selling pressure ensued that brought the index down, eroding the gains earlier made in the session. O&GMCs, E&P, Cement and Steel sector stocks bore the brunt and waning investor confidence had its bearing on technology stocks as well.

    Among volume leaders, TRG led the table with 46.7 million shares, followed by WTL (42.8 million) and UNITY (37.5 million).

    Sectors contributing to the performance include Technology (+72 points), Banks (+59 points), Fertilizer (+18 points), Cement (76 points), E&P (-45 points), and Engineering (-24 points).

    Volumes increased from 343.2 million shares to 387.9 million shares (+13 percent DoD). Average traded value also increased by 36 percent to reach US$ 126.5 million as against US$ 92.8 million.

    Stocks that contributed significantly to the volumes include TRG, WTL, UNITY, GGL and TELE, which formed 45 percent of total volumes.

    Stocks that contributed positively to the index include TRG (+88 points), ENGRO (+37 points), NBP (+22 points), KTML (+18 points) and EFERT (+13 points). Stocks that contributed negatively include LUCK (-28 points), FFC (-22 points), POL (-18 points), OGDC (-16 points) and ISL (-15 points).

  • Sajidullah Siddiqui transferred as Member IT

    Sajidullah Siddiqui transferred as Member IT

    The Federal Board of Revenue (FBR) has announced the appointment of Sajidullah Siddiquie, a distinguished officer of the Inland Revenue Service (IRS) with the rank of BS-21, as the Member (IT) FBR.

    (more…)
  • Rupee falls by 24 paisas against dollar

    Rupee falls by 24 paisas against dollar

    KARACHI: The Pak Rupee fell by 24 paisas against the dollar on Wednesday owing to high demand for import and corporate payments.

    The rupee ended Rs153.23 to the dollar from previous day’s closing of Rs152.99 in the interbank foreign exchange market.

    The dealers said that the rupee was remained under pressure due to corporate demand for dollars during the day. They said that the corporate buyers were active as multinational companies and foreign companies usually repatriate profit and dividends on close of every quarter.

    They further said that the demand for import payment was also seen rising.

  • Habib Bank pays penalty of Rs42.2 million to SBP

    Habib Bank pays penalty of Rs42.2 million to SBP

    KARACHI: Habib Bank Limited (HBL) has paid monetary penalty of Rs42.2 million to State Bank of Pakistan (SBP) for violation of various regulatory provisions.

    According to HBL it paid Rs42.2 million during first quarter (January – March) of 2021 against penalties imposed by the SBP. The bank had paid around Rs231.6 million as monetary penalties to SBP in the same quarter of the last year.

    A total amount of Rs42.23 million was paid by the bank as penalties, including those imposed by other regulatory bodies. The bank had paid around 232.19 million as total penalty for the same quarter of the last year.

    The bank had paid an amount of Rs320.79 million as penalty for various regulatory violations during the year ended December 31, 2020.

    For the year ended December 31, 2020, the bank paid the amount of Rs320.79 million as penalties for violation of various regulations.

    However, the payment of penal amount reduced by 33 percent when compared with Rs480.56 million paid in the preceding year.

    The bank paid an amount of Rs296 million against fine imposed by the SBP for the year ended December 31, 2020. The latest amount of monetary penalty has been reduced when compared with Rs476 million that was imposed by the SBP on the bank during the preceding year.

  • Pakistan Customs launches automated scanning of imported consignments

    Pakistan Customs launches automated scanning of imported consignments

    ISLAMABAD: Pakistan Customs has launched a new automated scanning facility for containerized import consignments of industrial raw materials for speedy clearance, a statement said on Wednesday.

    The new system has been introduced in WeBOC system. The introduction of Non-Intrusive Inspection System by Customs was a long awaited initiative aimed at replacing physical inspection of cargo and reducing the dwell time at ports by using the latest scanning technology in line with international best practices.

    The Karachi Port and Port Qasim have Customs scanning facilities installed with the assistance of Japanese Government under JICA program in addition to the scanners of the terminal operators.

    The Blue channel will be part of the Risk Management System (RMS) through which Customs will be able to select the consignments of containerized cargo based on RMS by using computer program targeting the suspected shipments. The system shall operate without human intervention which is designed to be based on the risk profiling and risk parameters.

    The scheme is envisaged to reduce the physical examination of goods which is time consuming and costlier besides causing port congestion. The program has been implemented initially at KICT, SAPT terminals of Karachi port and at QICT, Port Qasim with effect from 19th April, 2021 for industrial raw materials and drastic reduction in clearance time of such consignments has been observed.

    The World Customs Organization (WCO) recommends the scanning of suspected cargo at ports and border stations for security of supply chain under its (SAFE) Security and Facilitation Framework and Kyoto Convention.

    By implementing the Blue channel, Pakistan Customs will not only be able to ensure security of supply chain but also ensure correct declaration of goods and secure legitimate payment of duty and taxes by the importers.

    This technological intervention will support in facilitating the trade by reducing the clearance time, saving cost, and decreasing port congestion leaving positive impact on overall cargo dwell time.  The program will go a long way in modernization of Customs procedures in Pakistan.

  • FBR urged to abolish withholding tax, minimum tax for commercial importers

    FBR urged to abolish withholding tax, minimum tax for commercial importers

    KARACHI: Federal Board of Revenue (FBR) has been urged to abolish withholding tax and minimum tax for commercial importers in the upcoming budget 2021/2022.

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for the upcoming budget said that commercial Importers of raw material pay withholding tax at 2 percent up to 5.5 percent which can only be possible if the gross profit is 30 percent, while the margin is not more than 2 to 3 percent on raw materials sold without value addition or change in form.

    By amendment to Section 148 of Income Tax Ordinance, 2001 through Finance Bill 2018-19, WHT paid on import of raw materials by commercial importers has been converted to minimum tax and the importers have been taken out of fixed tax regime (FTR).

    The chamber said that the concept of WHT is unique to Pakistan’s Tax regime which in fact is tantamount to putting the burden of tax-collection from undocumented entities on the compliant tax payers and avoiding the responsibility to broaden tax-base.

    After acquiring unprecedented powers to access information under Section 56 A and 56 B in Income Tax Ordinance, 2001, FBR and its subordinate departments must take the responsibility to identify non-compliant and undocumented entities/persons instead of laying the onus on existing taxpayers.

    The chamber proposed that concept of minimum tax and withholding tax may be abolished.

    Tax Payers may be allowed to pay certain Fixed Tax or opt for Audit regime and pay taxes in accordance with actual tax liability on Income.

    Furthermore, all Taxes deducted have to be adjustable against actual tax liability.

    Giving rationale, the chamber said that the commercial importers who are a major source of revenue will be able to resume their business and contribute to revenue as well as promotion of SMEs.