The Securities and Exchange Commission of Pakistan (SECP) has announced the closure of Companies Registration Offices (CROs) and facilitation centers until further notice as a preventive measure against the spread of coronavirus disease (COVID-19).
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SECP extends insurance license renewal date
ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has extended license renewal date for insurance brokers in the wake of coronavirus outbreak.
The SECP issued Circular No. 12 on Monday to extend the date for license renewal for insurance business.
The SECP said that considering the gravity of the pandemic coronavirus (COVID-19) on public health and lockdown situation in the country, insurance brokers, insurance surveyors and authorized surveying officers are facing difficulties while ensuring compliance with regulatory requirements related to renewal of license under the Insurance Ordinance, 2000.
The SECP said that in order to facilitate the insurance brokers, insurance surveyors and ASOs during the ongoing pandemic, the regulator issued following guidelines regarding renewal of licenses:
(i) Any insurance brokers/insurance surveyor/ASO whose license has expired or will expire during the period from March 15, 2020 to May 15, 2020 shall continue to carry on its business without renewal of its current license with the commission;
(ii) The above relaxation shall be effective for a period of two months i.e. it shall end on May 15. The respective insurance brokers, insurance surveyors, and ASOs shall be bound to file their applications prior to the deadline of May 15, 2020.
(iii) Upon receipt of the application, license shall be renewed effective from the date of expiry of the previous license.
(iv) Insurance brokers, insurance surveyors and ASOs facing difficulties to arrange documents, required under the Ordinance for renewal of license may avail the above mentioned relaxation.
(v) While surveyors/ASOs can file applications online through e-services, insurance brokers may send their applications to the commission via email until the expiry of the lockdown; and
(vi) All insurance companies/ general takaful operators shall continue to do business with insurance brokers /insurance surveyors/ASOs considering the grace period of two months for any license expired after March 15, 2020.
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SECP announces relief for corporate sector to dilute coronavirus impact
ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) on Wednesday announced regulatory relief for corporate sector in order to dilute impact of coronavirus.
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SECP discusses stock market situation
ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has discussed the situation of the stock market, which triggered halt for third time in this week.
The SECP team lead by the Chairman SECP and Commissioner(SM) held a detailed meeting with the CEOs of Pakistan Stock Exchange, National Clearing Company and Central Depository Company (Self-Regulatory Organizations – SROs) this morning, to review and discuss the stock market situation, risk management and business continuity.
The index based market halts were triggered for the third time during this week. This cooling-off period gave an opportunity to investors to align their trading strategy and collection of margins by the Clearing Company.
The participants of the meeting affirmed that risk management system was functioning efficiently and margins were being collected timely.
The Market operations were running smoothly as a whole. The SROs further apprised that their business continuity plans and disaster recovery setup was in place based on SECP’s earlier instructions.
The Chairman SECP emphasized on conducting drills to ensure remote operations of trading, clearing, settlement and custody services while allowing remote access of market participants to such systems in case onsite operations or physical access was impacted.
He also suggested adoption of further preventive measures against spread of coronavirus.
The SECP advised SROs to remain vigilant, continue to provide uninterrupted access to market participants and ensure effective risk management while maintaining actively engagement with their boards of directors and committees for close coordination.
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SECP issues advisory for companies on coronavirus threat
ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) on Thursday issued advisory for companies to protect from coronavirus threat.
In light of the threat posed by the evolving COVID-19 situation (Corona Virus) and to protect the wellbeing of shareholders, the SECP advised all companies to modify their usual planning for annual general meetings.
Meeting of the Board of Director may also be held through tele / video conferencing.
SECP has recommended all companies to consider and evaluate the risks in the present situation.
Every company, is required to hold, an annual general meeting (AGM) within sixteen months from the date of its incorporation and thereafter once in every calendar year within a period of 120 days following the close of its financial year.
As AGM season for December end companies is approaching, the directors and secretaries should modify their usual planning for their company’s AGM in light of the threat posed by the evolving COVID-19 situation.
Directors should consider if members can consolidate their attendance and voting at AGMs into as few people as possible through proxies, while honoring quorum provisions.
In order to avoid large gathering at one place, the companies may consider provision of video link facilities at different locations considering the geographical dispersal of its members.
The companies shall consider basic protective measures during the meeting including facility of cleaning hand with sanitizers or soap and water. Moreover, for safety of members seating arrangement shall be made at appropriate distance.
Furthermore, voting through postal ballot may be considered by the chairman of the meeting or by the members present in person or through video-link or by proxy having not less than one-tenth of the total voting power by demanding poll for resolutions.
This is safer option in current situation. The members of a private company or a public unlisted company (having not more than 50 members), may pass a resolution (ordinary or special) by circulation signed by all the members for the time being entitled to receive notice of a meeting, except for the ordinary businesses specified under sub-section (2) of section 134 of the Companies Act, 2017 to be conducted in the annual general meeting.
The directors may hold their board meetings through tele or video link provided that the minutes of such meeting are approved and signed subsequently by all the directors.
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Centralized repository to facilitate effective settlement of insurance claims: SECP
KARACHI: Pakistan’s first ever centralized information repository has been launched on Monday for life insurance sector.
This will complement government’s objectives of providing ease of doing business and enhanced consumer protection.
Aamir Khan, Chairman, Securities and Exchange Commission of Pakistan (SECP) in his keynote address said that the initiative would augment technological advancement in the insurance industry while ensure facilitation and protection of policyholders.
He hoped that it would facilitate effective settlement of insurance claims and cause reduction in mis-selling and policy churning.
“We, at the SECP are very mindful of our responsibilities as a progressive regulator that needs to help the industry to develop and grow, and simultaneously, create linkages between its regulated sectors and the real economy”, Khan said and underlined that the centralized documentation of data in digitalized form is critical to achieving transparency, speed and cost effectiveness.
He informed participants that the SECP has already embarked upon a transformational journey of digitalization through its recently launched initiative – ‘Leading Efficiency through Automated Prowess (LEAP).
This will enable 100 percent end-to-end automation, complete integration with multiple government agencies for one-time registration, and digitalization and storage of financial statements of companies through introduction of Extensible Business Reporting Language (XBRL).
The repository that will function under the regulatory impetus of SECP will hold critical data of life insurance policies electronically.
Shaukat Hussain, Commissioner Insurance, Moin M. Fudda, Chairman, Centralized Depository Company (CDC), Badiuddin Akber, Chief Executive Officer, CDC, senior officials from SECP, CDC, CEOs and representatives of life insurers, non-life insurers, and relevant stakeholders attended the launching ceremony.
The Centralized Repository will enable electronic storage of life insurance and family takaful policies and serve as central point for critical policyholder related information.
It will aid the underwriting function of the insurers to determine the appropriateness of an insurance policy, the level of insurance coverage and affordability of the insurance policy for the customer which will ultimately result in need-based selling and substantial reduction in mis-selling.
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SECP proposes amendments to prevent corporate money laundering
ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has proposed amendments laws to prevent money laundering through corporate entities.
A statement issued on Tuesday said that the SECP has issued a set of notifications, soliciting public consultation on drafts of amendments to the Companies (Incorporation) Regulations, 2017, Companies (General Provisions and Forms) Regulations, 2018, Foreign Companies Regulations, 2018, and Limited Liability Partnership Regulations, 2018.
The proposed amendments collectively make disclosures regarding the ownership and control structure of the companies and limited liability partnerships more transparent.
These amendments, issued in line with the recommendations on transparency of legal persons issued by the Financial Action Task Force, will help in identifying the real owners of such entities.
The amendments also propose to explicitly prohibit the issuance or transfer of equity and debt securities of a bearer nature as well as to increase the period for retention of records of dissolved companies.
The amendments will address the deficiencies highlighted in the country’s mutual evaluation report published by the Asia Pacific Group on Money Laundering in October 2019.
With the effect of propose amendments, Companies and LLPs would have to provide additional information to SECP, if the ownership and control structure of such entities is obscured through a chain of multiple entities, whether registered in Pakistan or abroad.
The draft Regulations define an ultimate beneficial owner as a person who exercises ownership or control rights over a company or LLP indirectly through multiple layers of corporate entities or other legal persons or any other arrangements.
Amendments suggested specifying a threshold of a minimum of 25 percent of ownership or control rights of the ultimate beneficial owner in the reporting entity, which would be owned through multiple layers of intermediate corporate entities.
In order to give effect to the proposed amendments, the Commission has also publicized the substantive provisions being added to the enabling laws, i.e. the Companies Act, 2017 and the Limited Liability Partnership Act, 2017.
The proposed amendments are placed on SECP’s website for public consultation.
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SECP proposes amendments to AML, CFT regulations to comply FATF recommendations
ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has proposed amendments to Anti Money Laundering and Countering Financing of Terrorism Regulations, 2018 as recommended by FATF.
The SECP on Wednesday said that the amendments had been proposed to further strengthen SECP’s AML/CFT regime.
The proposed amendments elaborate on the Risk Based Approach requiring regulated persons (RPs) including; securities brokers, futures brokers, insurers, Takaful operators, non-banking finance companies (NBFCs) and Modarabas to conduct risk assessment that is aligned with Pakistan’s latest National Risk Assessment and ensure implementation of Targeted Financial Sanctions.
The minimum information required for the purpose of KYC/CDD has been listed to make documentation requirements simple and clearer.
Moreover, the draft amendments provide more clarity on verification for Beneficial Ownership, close associates and family members of PEPs. The RPs are encouraged to use technological solutions for screening and monitoring of transactions as per best practices.
The SECP has tried to address the regulated sector’s feedback regarding gaps in the implementation of AML/CFT Framework.
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SECP extends company registration facility to transgenders
ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has extended facility of company registration to transgenders community.
The regulator introduced a separate category for members of transgenders community in its online portal for company registration and compliance i.e. eServices.
This initiative is in line with the government efforts to grant fundamental rights to transgender community, under the “the Transgender Persons (Protection of Rights) Act, 2018”.
This Act allows individuals to mention their identity on all official documents including IDs, passport, educational certificates and driving licenses.
Now, in eServices, a person has an option to self-identify under three classifications i.e. male, female and other. With this initiative, the transgender community is able to register a company or become shareholder or director in a company with personal identity of their choice.
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Companies listing simplified to promote capital formation: SECP
ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has said amendments have been made to regulations related to Initial Public Offering (IPO) to make listing simplified for promoting capital formation through securities market.
In a statement on Friday, the SECP said that it revamped initial public offering (IPO) regime to make the IPO process simple, cost effective and more efficient.
The amendments in IPO Regulations 2017, have been made after thorough consultation with market participants with an objective to promote capital formation by facilitating issuers and safeguarding the interest of general public by enhancing disclosures.
In the new set of regulations, the objective eligibility criteria for listing of companies have been simplified to promote capital formation through securities market.
Moreover, the issuers that have a track-record of less than three years and were not making profit from last two years are allowed to raise capital from securities market.
However, such Issuers are required to submit a business plan and provide enhanced risk disclosures in the offering document for prospective investors.
Further, with perspective of providing ease and reducing cost of IPOs, the requirement of submitting audited accounts has been reduced from 5 to 2 years.
In addition, the time frame relating to submission of progress report by the Issuer has been increased from quarterly to half yearly basis.
To safeguard the interest of the general public, certain parameters for green field projects (GFPs) have been introduced.
The said parameters include: (i) At least 51% equity contribution by the sponsors; (ii) successful business track record of the sponsors; (iii) experience and skills of the management to run GFP; (iv) mandatory financial close; (v)risk-based disclosure in the offering document etc.
Further, an exit offer mechanism has been introduced to protect the investors in case of change in the principal purpose of the issue.
In order to encourage foreign investment in the country, the Book Runner has been allowed to waive the margin requirement of the institutional investors including foreign investors.
Moreover, related parties have been allowed to perform different roles in the same IPO Transaction. The new IPO regime is a shift towards disclosure-based regime.
Disclosures pertaining to principal purpose of the issue, risk factors, share capital, financial information, management of the issuer, legal proceedings and overdue loans are made part of the prospectus.
A new section titled summary of the Prospectus has been introduced to help investors better understand the offering document.
Moreover, to facilitate small enterprises, startups and Greenfield companies that aspire to raise funds through capital markets, the SECP has already introduced an alternate board namely Growth Enterprise Market (GEM) at PSX.
The GEM is in addition to PSX’s main board for listing and trading of equity securities.