Major shareholders, executives of NBFCs: SECP proposes revision in fixed, proper criteria

The Securities and Exchange Commission of Pakistan (SECP) has proposed revision in the fixed and proper criteria of promoters, major shareholders, directors/chief executives and key executives of the Non-Banking Finance Companies (NBFCs). Through S.R.O.363(I)/2016, the SECP has proposed amendments in the Non-Banking Finance Companies and Notified Entities Regulations, 2008 here on Friday.
Under the Non-Banking Finance Companies and Notified Entities Regulations, 2008, the Fit and Proper Criteria in relation to an NBFC and Investment Company is applicable to the following persons: (i) promoters and major shareholders of the NBFC and Investment Company; (ii) director of the NBFC and Investment Company; (iii) chief executive of the NBFC and Investment Company; (iv) Key Executives of the NBFC and Investment Company. The said Fit and Proper Criteria has been proposed to be revised by the SECP.
Following is the text of the S.R.O.363(I)/2016 issued here on Friday: S.R.O.363(I)/2016.- The following draft amendments in the Non-Banking Finance Companies and Notified Entities Regulations, 2008 which are proposed to be made by the Securities and Exchange Commission of Pakistan in exercise of the powers conferred by sub-section (2) of section 282B of the Companies Ordinance, 1984 (XLVII of 1984) read with sub- section (4) of section 20 of the Securities and Exchange Commission of Pakistan Act, 1997 (XLII of 1997) are hereby published for information of all the persons likely to be affected thereby and notice is hereby given that comments, if any, received within fourteen days of the date of this notification will be taken into consideration.
In the aforesaid Regulations,-
(1) In Schedule IX, under the heading "Financial Soundness", for sub-clause (iii), the following shall be substituted, namely:-
"(iii) whether any instance of overdue or past due payment to a financial institution, irrespective of amount, is appearing in the overdue column of latest CIB report of the person and of the companies, firms, sole proprietorship etc where the person is a chief executive, director (other than nominee director), owner or partner etc.
Provided that the Commission shall provide an opportunity of making representation to the person in case of overdue or past due payment;
Provided further that the following exceptions may be granted by the Commission for the purpose of this sub-clause in case where:-
(a) Amount overdue is under litigation and the same is also appearing as amount under litigation in the CIB report; and
(b) No overdue payment appearing in the overdue column in the subsequent latest CIB report;"
(2) In Annexure A of Schedule IX, under part (a), after sub-clause (V) of clause 4(2), the following shall be inserted namely:-
"(VI) The person and the companies, firms, sole proprietorship etc where the person is a chief executive, director (other than nominee director), owner or partner etc has no overdue payment of any financial institution."