In a bid to mitigate the economic fallout of the ongoing COVID-19 pandemic, the Securities and Exchange Commission of Pakistan (SECP) has announced a series of relaxations in regulatory requirements for asset management companies (AMCs).
In a circular issued on Tuesday, marked as Circular No. 16 of 2020, the SECP unveiled its decision to ease certain provisions of the Non-Banking Financial Company (NBFC) Regulations, 2008. This move comes in response to the unprecedented challenges faced by businesses globally due to the coronavirus outbreak, which has been declared a pandemic by health authorities.
The SECP acknowledged the adverse impact of the pandemic on businesses across various sectors and recognized the hurdles encountered by Asset Management Companies in adhering to certain regulatory obligations outlined in the NBFC Regulations.
One of the key relaxations introduced by the SECP pertains to the submission of quarterly financial statements for both Open End Scheme and Close End Scheme for the quarter ending on March 31, 2020. Regulation 38(2)(f) of the NBFC Regulations mandates the submission of these statements within a specific timeframe. However, in light of the prevailing circumstances, the SECP has extended the deadline by an additional 30 days, allowing companies to submit their financial statements by May 31, 2020.
Moreover, the SECP has extended the time frame for compliance with the minimum fund size requirement for Open End Schemes, as stipulated in Regulation 54(3b) of the NBFC Regulations, 2008. For Open End Schemes currently falling short of the minimum fund size requirement, as well as those expected to become non-compliant within the next 90 days following the issuance of the circular, the SECP has extended the compliance period to 180 days.
This regulatory flexibility aims to provide relief to asset management companies grappling with the operational disruptions caused by the COVID-19 lockdown measures. By extending the deadlines and relaxing compliance requirements, the SECP seeks to alleviate the burden on companies and facilitate smoother operations amidst the challenging business environment induced by the pandemic.
The decision to relax regulatory provisions underscores the SECP’s commitment to supporting businesses and fostering resilience in the financial sector during these unprecedented times. It reflects a pragmatic approach aimed at balancing regulatory oversight with the need for flexibility and adaptability in response to evolving circumstances.
As the COVID-19 situation continues to evolve, the SECP assures stakeholders of its continued vigilance and responsiveness to the changing dynamics of the economic landscape. The commission remains committed to closely monitoring developments and implementing measures to safeguard the interests of investors and promote stability in the financial markets.
