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Tag: Securities and Exchange Commission of Pakistan

  • SECP notifies regulations to promote electronic trading of commodities

    SECP notifies regulations to promote electronic trading of commodities

    ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has notified regulations to promote warehouse receipt financing and electronic trading of agricultural commodities.

    The SECP on Friday issued Collateral Management Companies (CMC) Regulations, 2019 under the Companies Act, 2017 to promote warehouse receipt financing and electronic trading of agricultural commodities.

    Under these Regulations, any public limited company with a minimum paid-up capital of Rs. 200 million will be eligible for seeking permission of SECP to register as a CMC.

    A CMC, through its accredited warehouses, will provide storage and preservation services for a range of agricultural commodities.

    In doing so, a CMC, through its electronic warehouse receipt system, will issue warehouse receipts which can be used by farmers/depositors of agricultural commodity for financing from financial institutions and trading of electronic warehouse receipt at the exchange.

    The CMC will play an effective role in the agriculture value chain by ensuring security of collateral stored in the accredited warehouse through its robust oversight mechanism.

    Earlier, the SECP through a notification dated July 2, 2019 issued draft regulations for public consultation.

    During this consultative process, comprehensive deliberations were carried out with key stakeholders including the State Bank of Pakistan, Pakistan Banks Association, Pakistan Agricultural Coalition, Pakistan Mercantile Association and commercial banks.

    After incorporating comments of the stakeholders, the regulations have been notified.

    Salient amendments, after public consultation, include reduction in the registration fee of a CMC, removal of requirement for periodic accreditation, easing of documentary requirements for sponsors of a CMC, allowing electronic warehouse receipt to be traded on the exchange, and according enforcement powers to the CMC for cancelling accreditation of warehouse upon occurrence of certain events.

    SECP envisages that these amendments would help support its overall strategic objective of promoting ease of doing business.

    Promulgation of these regulations, in addition to providing a well-designed collateral management system, is envisaged to complement the agenda of the Government for uplifting agriculture sector which entails improved access to finance for farmers, improved farmer profitability and reduced risk for creditors through secure collateral.

  • Raising loans on interest prohibited, SECP issues draft amendment to Shariah regulations

    Raising loans on interest prohibited, SECP issues draft amendment to Shariah regulations

    ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Thursday issued draft amendments to Shariah Governance Regulations, 2018 saying that raising loans on interest is prohibited.

    In regulation 11, the SECP proposed following amendments:

    “(ii) the collective amount raised as loan on interest whether long-term or short-term debt does not exceed thirty percent of the market capitalization or total assets of the company, knowingly that raising loans on interest is prohibited whatsoever the amount is;

    “(iii) the total amount of interest-bearing deposits and Shariah non-compliant investments, whether short-, medium- or long-term, shall not exceed thirty percent of the market capitalization of total equity or total assets of company knowingly that interest taking deposits and investments are prohibited whatsoever the collective amount is”;

    The SECP further proposed amendment:

    “Provided that the prevailing Shariah screening criteria of the Exchange for all shares Islamic index may be used only for the companies on the all shares Islamic index, and shall be replaced with the above criteria by 30th June 2020.”

    For disposal of Shariah non-compliant investments, the SECP proposed:

    “Shariah compliant companies shall divest the Shariah non-compliant investments above thirty per cent threshold within a period of one year or when the market value of the investment equals the cost of investment, whichever is earlier:

    “Provided that the Commission may, for reasons to be recorded in writing and subject to such conditions or restriction as it may deem fit to impose on recommendation of the Shariah Advisory Board, relax any of the requirements of this regulation in case of any difficulty arises in giving effect to any of the requirements of this regulation in a particular case, or class of cases.”

    In regulation 3, it is proposed:

    “Provided that the companies on PSX All Shares Islamic index shall be deemed to be Shariah compliant till December 31, 2019:

    “Provided further that for purpose of availing tax rebate, the Shariah compliant companies referred in the first proviso shall meet the criteria as prescribed in Income Tax Ordinance, 2001.”

  • No action against companies for gold, valuables recovery: SECP

    No action against companies for gold, valuables recovery: SECP

    ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Tuesday strongly refutes the reports attributing the commission for taking action against companies to recovery gold and other valuable properties.

    In a statement the SECP said, being the apex regulator of the corporate sector, the SECP is taking all necessary steps to ensure beneficial regulation and growth of capital market and corporate sector in Pakistan.

    SECP strongly refutes news items appearing in a section of the press attributing any purported action against companies to recover gold and other valuable properties.

    “No crackdown of any sort is being planned or under consideration of the Commission,” it said.

    It is also clarified that SECP does not regulate or enforce Income Tax Ordinance, 2001 or Benami Transactions (Prohibition) Act, 2017.

    SECP powers are restricted to offences provided in the SECP Act, 1997, and other administered legislation as provided in its Schedule.

    The recently notified Rules, i.e. the “SECP (Search and Seizure) Rules, 2019” are a requirement of law under section 31 of the SECP Act, 1997, which merely lays down strict procedures for use of powers by the SECP’s investigation officers.

    It is reiterated that these powers are restricted to investigations ordered by the Commission under the SECP-administered legislation. As wrongly reported in a section of the media no new powers have been bequeathed to the SECP.

    It is clarified that the powers of search and seizure and forced entry have been part and parcel of the SECP Act, 1997, since the establishment of the Commission.

    It is stressed here that recently notified Rules are aimed at helping the Commission to curb any potential misuse of authority by the investigation officers.

    The Rules, inter alia, require investigation officers to first seek authorization, in writing, from the Commission, comprising of five Commissioners for the purpose of search and seizure. Further, in certain circumstances, the order from the relevant magistrate is also required.

  • FBR asks SEPC to ensure quality financial reporting by registered companies

    FBR asks SEPC to ensure quality financial reporting by registered companies

    ISLAMABAD: Federal Board of Revenue (FBR) has asked Securities and Exchange Company of Pakistan (SECP) to ensure quality of financial reporting of registered companies.

    In this regard Chairman FBR Syed Muhammad Shabbar Zaidi, in his letter to Chairman SECP, has requested to ensure correct and transparent submission of financial statements by the companies.

    In his letter the Chairman has stated that it has been observed that in many cases the quality of the accounts/financial statements prepared by the financial businesses specially in the cases of private limited companies is not in line with the quality standards and in many cases huge additions to income, are made, which are in many cases, are non-defensible, in taxation proceedings.

    Chairman FBR further added that quality of ‘Audit’ by the taxation officer is not as per best practices. FBR is improving the system and shall seek Institute’s assistance or guidance on the matter, he added.

    The extension in date of filing for return for companies also for Tax Year 2018 has only been given to provide an opportunity to the companies, especially private companies, to review their accounts and file improved position if required. In the past, FBR’s stance on the matter was different and as per information, no case was ever referred to for any disciplinary proceedings against Auditors by the institute or Management of the companies by SECP to FBR.

    “Now we intend to act diligently in the matter,” Chairman FBR added.

    The government has initiated an overall reform package for improving documentation and improving the quality of financial accounting which form the basis of taxation.

    The accounts prepared under the Companies Ordinance, 2016 form the basis for the same. However, this objective can only be achieved once the quality of annual financial statements are in line with the international best practices. It is therefore suggested that special and concerted emphasis be laid down by both the addressee institutions for assuring that the financial statements furnished reflect correct financial position and there is no possibility of any understatement, including non-compliance with the laws of taxation as prevalent in Pakistan especially withholding provisions.

    In order to achieve this task, it is advised that immediate actions be undertaken to start the reformed process. Chairman FBR stated that necessary instructions be issued for the same to the relevant field formations.

    Furthermore, if allowed under the law, the investigations and disciplinary proceedings initiated against the Directors and the Auditors by SECP and the Institute respectively, if any, are shared with the Federal Board of Revenue, if possible, under the law, in order to ensure proper accounting of income and amount of taxes due.

    Chairman FBR assured that such information will remain confidential. Chairman FBR also suggested an urgent meeting with Chairman SECP in this regard.

  • SECP holds consultation session to review Bancassurance regulations

    SECP holds consultation session to review Bancassurance regulations

    KARACHI: The Securities and Exchange Commission of Pakistan (SECP) has organized a stakeholders’ consultations session to review the changes in insurance regulatory framework governing Bancassurance, a statement said on Friday.

    Bancassurance has been contributing towards the growth of the insurance sector by increasing insurance penetration and addressing financial inclusion in the Pakistan.

    SECP has in the past issued guideline in 2010 and subsequently Bancassurance Regulations, 2015.

    Due to the recent bearish performance of the stock market, the insurance policyholders have suffered short term losses due because most of the products sold to bancassurance is unit linked in nature.

    Therefore to provide impetus to development of insurance market, particularly the Bancassurance, the SECP has developed amendments in the Bancassurance Regulations, 2015 and holds a stakeholders’ consultation session on June 12, 2019 at Karachi.

    The session was attended by the State bank of Pakistan (SBP), insurance companies, Federal Insurance Ombudsman (FIO) and members of the Small Dispute Resolution Committees.

    The participants thoroughly discussed the proposed changes and appreciated the SECP for taking such initiatives.

    However, the industry participant placed emphasis that SECP should give due consideration to the market development aspects as well as increasing regulatory controls for protection of the policyholders’ interest.

    The participants stated that under the current economic conditions SECP should also give consideration to ease of doing business.

  • SECP to facilitate startups under PM’s Kamyab Jawan Program

    SECP to facilitate startups under PM’s Kamyab Jawan Program

    ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has assured to provide all necessary measures for the nascent companies to be registered in communication, tourism and postal sectors under Startup Pakistan Programme of Prime Minister’s Kamyab Jawan Programme.

    This assurance was given by Farrukh Sabzwari, Chairman, SECP at a meeting with Muhammad Usman Dar, Special Assistant to the Prime Minister on Youth Affairs at a meeting on Monday.

    The meeting discussed preferential treatment for the registration of new startup companies through an online process under Prime Minister’s Kamyab Jawan Programme.

    It would not only promote entrepreneurship culture in the country but would also empower youth both socially and economically.

    Muhammad Usman Dar appreciated commitment of Security and Exchange Commission of Pakistan in facilitating and promoting business activities in the country for the creation of employment opportunities for the youth.

  • Secured transactions registry established in SECP

    Secured transactions registry established in SECP

    In a significant development aimed at improving access to credit for small businesses and the agriculture sector, the Securities and Exchange Commission of Pakistan (SECP) has officially established the Secured Transaction Registry (STR). This registry will record charges and security interests created by entities on their movable assets, facilitating easier and more secure access to loans.

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  • Total number of registered companies increases to 99,291: SECP

    Total number of registered companies increases to 99,291: SECP

    ISLAMABAD: The total number of registered companies has increased to 99,291 by end of April 2019, Securities and Exchange Commission of Pakistan (SECP) said on Friday.

    The SECP said that it registered 1,460 new companies in April 2019 and the majority of them were registered within four hours.

    As compared to the corresponding month of last financial year, the growth in incorporation of companies is noticed as 29 percent, raising the number of registered companies to 99,291.

    The massive increase in the new incorporations is the result of the SECP’s reforms in the ease of doing business, i.e. introduction of simplified combined process for name reservation and incorporation, one window facility for company incorporation and NTN generation, reduction in fee and enhanced assistance of investors by facilitation wings established by the SECP.

    The SECP has upgraded browser’s compatibility and now in addition to Internet Explorer, other browsers such as Google Chrome, Mozilla Firefox and Microsoft Edge can be used for name reservation and company incorporation processes. Consequently, 95 percent companies were registered online.

    During the month 73 percent companies were registered as private limited companies, while 24 percent were registered as single-member companies.

    Three percent were registered as public unlisted companies, not for profit associations, foreign companies and limited liability partnerships (LLP).

    The trading sector took the lead with the incorporation of 260 companies, services with 174, I.T. with 163, construction with 154, tourism with 81, real estate development with 67, food and beverages with 61, marketing and advertisement with 42, education with 41, corporate agricultural farming with 38, textile with 33.

    Thirty companies belong to engineering, 26 to transport, 25 to healthcare, 21 each to pharmaceuticals, and fuel and energy, 20 to mining and quarrying, 19 to communication, 17 to cosmetics and toiletries, 16 each to auto and allied, and logging, 15 to chemicals, 14 each to broadcasting, and paper and board, 13 to cable and electric goods. Seventy-nine companies were registered in other sectors.

    Foreign investment has been reported in 66 new companies. These companies have foreign investors from Canada, China, Denmark, Germany, Jordan, Korea South, the Netherlands, Nigeria, Norway, Oman, Saudi Arabia, Singapore, Turkey, UAE, UK, Ukraine and the US.

    The highest numbers of companies, i.e. 503 were registered in Islamabad, followed by 406 and 311 in Lahore and Karachi respectively.

    The CROs in Peshawar, Multan, Gilgit-Baltistan, Faisalabad, Quetta, and Sukkur registered, 79, 58, 38, 38, 21 and 6 companies respectively.

  • SECP holds awareness session for NPOs on AML/CFT

    SECP holds awareness session for NPOs on AML/CFT

    ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has conducted an awareness session on Anti-Money Laundering (AML)/Counter-Terrorism Financing (CFT) in collaboration with of Institute of Chartered Accountants of Pakistan (ICAP), a statement said on Friday.

    The SECP said that the awareness session was conducted AML/CFT obligations of non-profit organizations (NPOs) licensed under section 42 of the Companies Act, 2017, for Lahore-based registered intermediaries.

    Around 100 participants from the NPO sector, registered intermediaries and ICAP members were in attendance.

    An SECP official made a detailed presentation on the AML/CFT regulatory requirements as well as the mechanism for implementation of United Nations Sanctions Regime under resolutions 1267 and 1373 for designation of terrorist organizations and individuals.

    The session focused on the relevant recommendations of the Financial Action Task Force as well as findings of the National Terrorism Financing Risk Assessment, including directions, channels and sources of terror finance, risk assessment of NPOs, and various policy, legislative and administrative measures for terror financing risk mitigation.

    It also helped participants in improving the understanding of suspicious transaction reporting requirements under the AML/CFT framework.

    The session also discussed the regulatory measures contained in the regulations for NPOs and intermediaries to prevent money laundering and terror financing abuses, supplemented by the best practices and recommendations contained in the AML/CFT guidelines for NPOs issued by it.

    The official emphasized the fact that regulatory action against non-compliant NPOs is a regular feature of the SECP’s enforcement strategy, which will continue in the future.

  • Registration of companies crosses 95,000: SECP

    Registration of companies crosses 95,000: SECP

    ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has said that total registration of corporate registration has crossed over 95,000 units following 1,317 new registrations in January 2019.

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