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Tag: Securities and Exchange Commission of Pakistan

  • Stern action initiated against companies using FBR, SECP registrations for illegal investment

    Stern action initiated against companies using FBR, SECP registrations for illegal investment

    ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has initiated stern action against companies engaged in attracting the general public for unauthorized investments by using registrations of relevant authorities.

    In a statement on Thursday, the SECP said that mere registration of a company with SECP does not authorize acceptance of deposits from general public.

    Deposit taking by companies other than banking companies is illegal in terms of section 84 of the Act. Financial services including car financing, leasing, acceptance of deposits, house financing etc. can only be offered by specialized companies holding valid licence and regulatory approvals.

    General public is advised in their own interest to be careful, not to deal and invest in illegal schemes offered by such companies.

    In this regard, the SECP while exercising its regulatory power to curb the menace of illegal business practices in the country has taken stern actions against “Lasani Oil Traders (Private) Limited” and “New Lassani Chicks & Chicken (Private) Limited”.

    SECP has promptly initiated legal proceedings for the winding up of these companies in terms of section 301 read with section 304 of the Companies Act, 2017 and disqualification of directors thereof in terms of section 172 of the Act.

    SECP has observed that both the companies are using their registration with SECP and FBR to win public confidence and are publicizing unauthorized investment schemes through Facebook groups and posts on social media.

    In an attempt to block companies’ access to general public, SECP approached PTA to block Facebook/twitter pages, cell phone numbers registered in the name of companies and its directors. The SECP has also made reference of the case to the relevant law enforcement agency.

    The SECP has made public a list of 50 companies, involved in similar un-authorized business activities including illegally collecting deposits from investors by making false promises of exceptionally tantalizing returns.

  • SECP issues requirement for digital account opening by AMCs

    SECP issues requirement for digital account opening by AMCs

    ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Thursday issued criteria for opening of digital accounts for Pakistani individual customers by Asset Management Companies (AMCs).

    Following is minimum criteria for opening of digital accounts for Pakistani Individuals by AMCs:

    Eligible customers;

    01. Pakistani individual customers having:

    i. an active account at any bank/active e-wallet mobile account; and

    ii. an active mobile number in his/her own name.

    02. Minimum customer information/personal profile/documents required by AMCs:

    The customer shall access the online portal (website, mobile App or any third party application) and provide the following minimum information for the purpose of registration:

    i. Customer’s name

    ii. Father/spouse name

    iii. Date of birth

    iv. CNIC/identification number with scanned copy along with date of issuance and expiry

    v. Existing residential and mailing address

    vi. mobile number registered in his/her name

    Provided that the AMCs may in special circumstances use where the Pakistani individual customer does not have mobile number in his/her own name, the mobile number of close family member or the mobile number provided to Pakistani individual customers by his/her employer, or the international mobile number of Pakistani individual customer having CNIC/NICOP and an active account at any bank/active E-Wallet mobile account subject to the following:

    In case where mobile number of close family member is provided, a duly signed written authorization, on prescribed format, from both the Pakistani individual customers and the person whose mobile number is being provided;

    In case where mobile number provided by employer is used, Pakistani individual customer shall provided the bill of service provider in accordance with the procedures and a letter from employer stating that the said mobile number is provided by employer to its employee;

    In case where international mobile number is used, Pakistani individual customers shall provide the bill of service provider in accordance with the procedures.

    Explanation: For the purpose of this circular, the term ‘close family member’ shall mean and include spouse, dependent parents and dependent children only.

    vii. email ID

    viii. Mother’s maiden name

    ix. Bank/E-Wallet Name and Bank Account IBAN Number / E-Wallet Mobile Account Number

    x. Digital / online signature card

    xi. Details of nominee

    xii. Source of fund/income

    xiii. dividend mandate

    xiv. operating instructions, if any

    xv. statement of account request

    xvi. digital/online declaration regarding profession and source of fund/income along with uploading of valid documents as proof thereof

    xvii. digital/online undertaking declaring that funds being invested are his/her own funds and that the funds beneficially owned by other persons will not be used and uploading of declaration / undertaking as a proof thereof

    xviii. Digital/online consent for account opening and using information/documents provided digitally / online for necessary due diligence and verification functions

    xix. Digital / online acceptance of terms and conditions of the account

    xx. Any other documents required under AML Act, 2010 and Securities and Exchange Commission of Pakistan (Anti Money Laundering and Countering Financing of Terrorism) Regulations, 2020 (AML/CFT Regulations) (customer specific)

    After submission of the required information and documents, a message shall pop up for the customer on the online portal that his/her request is in process and he/she will receive an One Time Password (OTP) once the basic information is verified.

    03. Verification by AMCs

    AMCs will carry out required due diligence including but not limited to:

    a. verification of the CNIC/National Identity Card for Overseas Pakistanis (NICOP)/ Pakistani Origin Card (POC) of customer through NADRA VERISYS;

    b. the CNIC and mobile number pairing (whether it is registered in the name of the customer) through Pakistan Mobile Network Database.

    Provided further that in all the circumstances mentioned in proviso of clause 2(vi), AMC shall perform digital verification to conduct online face to face interaction on real time basis through any virtual meeting application (Whatsapp, skype etc.) for authentication of the customer and original identification document.

    c. Screening of the prospective customer against application sanction regimes (UNSC, NACTA, etc.)

    d. IBAN / E-Wallet Mobile Account Number verification through 1-link title fetch service or IBAN/W-Wallet Mobile Account Number and CNIC pairing or Digital Verification to conduct online fact to face interaction on real time basis through any virtual meeting application (Whatsapp, skype etc.) for authentication of the customer and original identification document;

    Provided that for such Pakistani individual customer who do not have mobile number is their own name or provide international mobile number, IBAN/E-Wallet Mobile Account Number verification through 1-Link title fetch service or IBAN/E-Wallet Mobile Account Number and CNIC Pairing and Digital Verification to conduct online face to face interaction on real time basis shall be mandatory.

    e. Verification of contact details through one time password, email or call back;

    In case the verification is successful, an OTP shall be generated and immediately sent on the designated mobile number and/or email address of the customer, as the case may be, valid for a limited period of time.

    f. AMC shall ensure before opening the account that all documents required for screening and risk rating are available and it can conduct screening and risk rating.

    g. the customer will not be allowed to proceed in case the information cannot be successfully verified by AMC.

    04. Account Opening and Activation:

    The AMC will proceed with opening of account after the customer has successfully accessed the portal using the OTP. Account may be opened after due diligence checks and satisfactory completion of the requirements. The opening of customer account shall be subject to compliance with all other applicable legal and regulatory requirements.

    05. Additional Measures by AMC:

    > AMCs shall develop SOPs for:

    * Information and documents to be collected through website/mobile App;

    * Turnaround time (TAT) for decision to open or decline account is 3 working days from the time of upload of all information/documents. In case of any discrepancy in documents or where additional documents are required, AMC would revert back to customer within three working days;

    > AMCS shall not open digital/online accounts in joint names;

    > AMCs may record the real time online fact to face interaction call with the customer while carry out KYC process for opening of account;

    > AMCS to ensure data/ privacy protection, safety and security of information/ documents through reliable IT infrastructure;

    > AMCs should ensure to deploy necessary technical infrastructure and system while establishing business relationship through e-KYC to comply with AML/CFT regime of the country;

    > After opening of account, as part of ongoing monitoring and customer due diligence, AMCs may seek additional information from customers based on their ongoing internal risk assessment and compliance framework;

    > AMCs may carryout periodical re-profiling of the customers in accordance with AML/CFT policy;

    > AMCs shall deploy adequate controls to ensure that customer is not a robot (e.g. CATPCHA Codes);

    > AMCs shall ensure customer care service through call center;

    > To eliminate the risks of impersonation of the customer or identity theft, the AMC should take appropriate security measures;

    06. Types of CIS offered by AMCs

    > All types of mutual funds may be offered to the customers subject to minimum investment limits as per the Constitutive Document of the fund and compliance with disclosure, disclaimer, risk profiling, risk categorization and other regulatory requirements.

    AMCs shall at all times comply with all requirements of AML Act, 2010 and AML/CFT Regulations, 2020 issued by SECP from time to time.

  • SECP registers 1,956 new companies in November

    SECP registers 1,956 new companies in November

    ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has registered 1,956 new companies in November 2020, indicating an increase of 41 percent as compared with the same month of the last year, according to a statement issued on Tuesday.

    Around 71 percent companies were registered as private limited companies and 26 percent were registered as single member companies.

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

    In November, around 99 percent companies were registered online, while 30 percent of new incorporations completed same day.

    This month, 117 foreign users registered companies from overseas.

    The trading sector took the lead with the incorporation of 319, IT with 230, construction with 209, services with 198, real estate development with 139, corporate agricultural farming, & food and beverages with 74 each, ecommerce with 73, engineering with 60, tourism with 51, education with 48, pharmaceutical with 47, market & development with 43, textile with 40, transport with 35, chemical with 33, healthcare with 31, auto & allied with 27, fuel & energy, and mining & quarrying with 23 each, logging with 22, cosmetics & toiletries with 21, communications with 17, broadcasting & telecasting with 16, power generation with 14, cables & electric goods, and steel & allied with 12 each, and 65 companies were registered in other sectors.

    Foreign investment has been reported in 34 new companies. These companies have foreign investors from, Australia, China, Germany, Iran, Italy, Kazakhstan, Korea South, Lebanon, Mozambique, the Netherlands, Russia, Spain, Switzerland, Syria, Turkey, the UAE, the UK and the US.

    The highest numbers of companies, i.e. 628 were registered in Islamabad, followed by 625 and 349 companies registered in Lahore and Karachi respectively. The CROs in Peshawar, Multan, Faisalabad, Gilgit-Baltistan, Quetta and Sukkur registered 127, 109, 64, 27, 22 and 05 companies respectively.

  • SECP allows online account opening to capital market investors

    SECP allows online account opening to capital market investors

    ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) on Thursday allowed Pakistani residents and non-resident investors to open online account in the capital market.

    A statement issued by the SECP stated that this new regime is part of the SECP’s digital transformation agenda, allows investors to seamlessly open his or her account with a broker from anywhere in the country without requiring to submit any documents physically or visit a broker. “The new hassle-free process shall enable investors to commence trading swiftly.”

    However, to ensure maximum investor protection, an alternate online customer verification process has been introduced for opening of online account.

    “The online verification will be conducted independently by the Centralized KYC Organization. In addition, the account opening process has been made simpler by reducing the number of pages to be signed by the investors.”

    The new account opening system is a continuation of SECP’s reform agenda that aims at enhancing investor outreach, introducing digitization and ensure robust growth of the capital markets.

    A sizeable investor base is a crucial stepping stone for development of any capital market and is therefore part of the major objectives of the SECP.

    “It is expected that the new regime would revolutionize Pakistan’s capital market and contribute significantly towards economic growth in the country by channeling investment and savings through the market,” the SECP said.

  • SECP extends coronavirus contingency plan for corporate meetings

    SECP extends coronavirus contingency plan for corporate meetings

    ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has extended the applicability of coronavirus related contingency planning for general meetings of shareholders.

    In a notification issued on Friday, the SECP extended the applicability of its circular No. 5 of 2020 dated March 17, 2020 to annual general meetings and extra-ordinary general meetings to be held up till January 31, 2021.

    In its circular no. 5 dated March 17, 2020, the SECP issued following coronavirus contingency planning for annual general meetings of shareholders:

    In light of the threat posed by evolving COVID-19 situation (coronavirus) pandemic and to protect the wellbeing of shareholders, the SECP issued the following directives:

    i. In order to avoid large gathering at one place, the companies shall consider provision of video link facilities, webinar or other electronic means.

    ii. The companies shall also provide email, WhatsApp number, mobile number or any other electronic mean through which shareholders can provide comments/suggestions for the proposed agenda items of the AGM.

    iii. The companies shall disseminate the aforesaid details to the shareholders through its website, Pakistan Stock Exchange and addendum/notice in newspapers along with complete information necessary to enable them to access the facility. Any change in venue shall also be communicated.

    iv. It will be responsibility of the company secretary and chairman of the meeting that comments / suggestions of the shareholders should be discussed in the meeting and made part of the minutes of the meeting.

    v. Maximum participation of shareholders be ensured via electronic means and by requesting members to consolidate their attendance through proxies, while honoring quorum provisions.

    vi. The companies shall consider protective measures during the meeting i.e. provision of hand sanitizers, masks and distant seating etc.

    vii. For special business voting through postal ballot shall be considered.

    viii. With reference to Circular No. 02/2018 dated February 09, 2018 it is re-emphasized that the provision of gifts/incentive in any form to shareholders at or in connection to general meetings is strictly prohibited under Section 185 of the Act.

  • SECP recommends allowing individuals to act as securities, futures advisors

    SECP recommends allowing individuals to act as securities, futures advisors

    ISLAMABAD, July 5, 2023 – In a bid to promote the capital market and enhance financial inclusion, the Securities and Exchange Commission of Pakistan (SECP) has recommended allowing individuals to act as securities and futures advisors. This proposal aims to broaden the investor base and expand the outreach of the capital market.

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  • SECP proposes amendments to insurance laws

    SECP proposes amendments to insurance laws

    ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has issued draft bill to amend Insurance Ordinance 2000 with aim to bridge regulatory gaps in existing laws.

    The draft law has been placed on SECP’s website for stakeholders and public consultation.

    The draft bill will address the regulatory gaps in existing law and provide a conducive regulatory environment to encourage market development, the SECP said.

    It will facilitate use of technology, provide ease of doing business and address entity specific and systemic risks by shifting towards Risk Based Supervision (RBS) and Risk Based Capital (RBC) Regime, it added.

    The amendments in law will also strengthen the regulatory framework and ensure its alignment with the Insurance Core Principles (ICP) of the International Association of Insurance Supervisors (IAIS).

    The significant reforms proposed in the draft bill include introduction of dedicated micro-insurers, provisions for regulation of takaful and re-takaful, regulation of local and foreign reinsurance business for enhancement of local capacity, regulation of reinsurance brokers, flexibility for introduction of new intermediaries, insurance repository and insurance self-network platform, provisions for regulation of index based insurance and InsurTech.

    Provisions for introduction of RBS and RBC regime and establishment and operation of a guarantee fund for insolvency of insurers have been included to strengthen the regulatory framework and align the law with core principles of IAIS and address systemic risk.

    The amended law will also assist in enhancing compliance with AML/CFT frameworks.

    The changes include requirement of appointed actuary and product filing of personal lines for non-life insurance, appointment of internal actuary for life insurers and enhancement of market conduct provisions.

    The regulatory powers of the Commission for regulation and supervision of insurance companies and intermediaries, have also been streamlined in the draft bill.

  • SECP issues draft professional clearing members regulations

    SECP issues draft professional clearing members regulations

    ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has issued draft Professional Clearing Members (PCM) Regulations, 2020 for public consultation.

    Professional clearing members denotes the concept of a third party independent institution, which will offer custodial and clearing/ settlement services to securities brokers and their customers.

    PCM can be a financial institution, such as a commercial bank, Non-Banking Finance Company etc., or a specialized entity formed for this purpose. PCM will handle the custody and clearing/ settlement functions for brokers that will significantly reduce compliance burden, ensure efficiency in businesses and allow brokers to focus on their key competencies.

    The new regulations will evolve a new business model, which will support ease of doing business, and reduce operational costs.

    The draft PCM Regulations lay down licensing, conduct and operational requirements for PCM which include eligibility criteria, development of important policies and procedures, measures for ensuring customer asset protection and segregation, confidentiality of customer information and compliance with corporate governance requirements etc.

    Earlier, SECP had introduced the concept of categorization of securities brokers and segregation of trading and custodial/ settlement functions, whereby only those brokers which fulfill the eligibility criteria can offer custodial/ clearing services.

    As per the new model, Trading Only brokers can transfer their custody/clearing services to brokers which meet significantly higher eligibility criteria and licensed as Trading and Clearing brokers.

    PCM framework is a crucial milestone in implementing the new broker regime and introducing international best practices. It will mitigate the market risk and further strengthen the custody protection measures to safeguard interest of the investors.

    The draft PCM Regulations are available on SECP website and comments may be shared with the SECP by July 17, 2020.

  • NBMFCs allowed deferring loan repayment for one year

    NBMFCs allowed deferring loan repayment for one year

    ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has allowed non banking microfinance companies (NBMFCs) to defer loan payment of borrowers for one year.

    The SECP issued circular No. 21 of 2020 on Monday and allowed that NBMFCs may, upon a written request of a borrower received before September 30, 2020, defer repayment of principal loan amount by one year, provided that the borrower will continue to service the mark-up amount as per agreed terms and conditions.

    The SECP issued circular 09 of 2020 dated March 31, 2020 to allow three months’ extension in time to NBMFCs for accepting borrowers’ requests to defer repayment of principal loan amounts.

  • SECP extends date for AMCs to comply with investor’s suitability assessment

    SECP extends date for AMCs to comply with investor’s suitability assessment

    ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has extended date for Asset Management Companies (AMCs) to comply with mandatory requirement of providing investor’s suitability assessment.

    A statement issued on Wednesday the SEPC said that to provide mutual fund industry further relief in fulfilling regulatory compliance requirements during COVID-19 pandemic the regulator has extended the timeline for AMCs to meet investor’s suitability assessment requirements, stipulated in Circular No 2 of 2020.

    The extended timeline is July 24, 2020.

    SECP’s suitability assessment requirements require AMCs to classify the Collective Investment Schemes (CIS) and investment plans with regards to the risk of principle erosion, ranging from very low risk for money market funds to high risk for equity funds.

    AMCs are also required to ensure suitability of CIS/Plan to the investor and assess the risk profiles of investors before his/her investment in any specific product or strategy.

    Effective implementation of AMCs risk profiling mechanism will ensure that the investor makes an informed investment decision while investing in any mutual fund/plan, as per his/her risk profile.