RDA: SECP exempts banks from obtaining license

RDA: SECP exempts banks from obtaining license

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has exempted banking companies from obtaining licenses to undertake regulated securities activity as security advisors.

A notification issued by the SECP stated that it had granted an exemption to the banking companies licensed and authorized by the State Bank of Pakistan (SBP) to open RDA and perform the function of distributing units of Collective Investment Schemes (CIS) and/or Voluntary Pension Schemes (VPS) of multiple Asset Management Companies (AMCs) to their RDA holders, from the requirement of obtaining a license to undertake regulated securities activity as security advisor.

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“Provided that such banking companies shall comply with all other requirements prescribed under the applicable regulatory framework,” the SECP said.

The regulator said that the measure has been taken to facilitate overseas Pakistanis to invest in mutual funds and private pension funds managed by AMCs, and comes as part of SECP’s efforts to increase investor-base in Pakistan’s capital markets by enabling investments through RDAs.

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However, the permission is only applicable to banks that are eligible to open RDAs. For transfers to accounts other than RDAs, the license requirement is still applicable under Securities & Future Advisor Regulations, 2017.

It is expected that this initiative will broaden the range of available investment avenues for Overseas Pakistanis and increase flow of foreign remittances to the country.

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