SECP notifies conditions for lending securities by asset management companies

SECP notifies conditions for lending securities by asset management companies

ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has prescribed conditions for lending of securities by Asset Management Companies on behalf of Collective Investment Schemes.

The SECP issued Circular No. 18 of 2019 dated December 20, 2019 and prescribed the following conditions for lending of securities by Asset Management Companies on behalf of Collective Investment Schemes:

I. An Asset Management Company on behalf of Collective Investment Schemes namely equity, asset allocation, balanced and index schemes may lend equity securities maximum up to 10 percent of net assets of such collective investment schemes out of its equity portfolio.

II. An asset management company on behalf of Collective Investment Scheme shall lend securities only through platform provided by an authorized intermediary for the purpose of securities lending and borrowing as per the Securities (Leveraged Markets and Pledging) Rules, 2011.

III. An asset management company shall make necessary amendments in offering document of respective Collective Investment Scheme and given necessary notice to the unit holders as per the requirements 44(7) of Non-Banking Finance Companies (NBFC) Regulations 2008.

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