The Securities and Exchange Commission of Pakistan (SECP) has decided to place limit/conditions for investment in listed securities, where the company or trust intend to make an investment out of the fund/trust in bonds, redeemable capital, debt securities or instruments, etc.
Under the SRO 435(I)/2018 issued by the SECP here on Tuesday, the SECP has issued draft Employees Contributory Funds (Investment in Listed Securities) Regulations, 2018.
These Regulations shall apply to all provident funds, contributory pension funds or any other contributory retirement funds constituted by a company or where a trust has been created by a company to manage such funds in respect of all the investments made by company or trust, as the case may be, in bonds, redeemable capital, debt securities or instruments issued by a statutory body, units of collective investment schemes registered as notified entities with the Commission and in listed securities including shares of companies, bonds, redeemable capital, debt securities and equity securities.
Provided that these Regulations shall not apply to a company governed under Voluntary Pension Systems Rules, 2005.
Within one year from the date of commencement of notification of these Regulations, all investments from the provident fund, contributory pension fund or any other contributory retirement fund constituted by a company or where a trust created by a company with respect to provident fund, contributory pension fund or any other contributory retirement fund, as the case may be, shall be brought in conformity with the provisions of these Regulations.
The fund or trust, as the case may be, shall obtain one time written permission from the employees for allowing the fund or the trust for making any investment out of their contributory fund or trust under these Regulations.
Limit for investment in listed securities: Where the Company or trust decide to make an investment out of the fund or trust, as the case may be, in: bonds, redeemable capital, debt securities or instruments issued by a statutory body or; securities listed on Pakistan Stock Exchange, including shares of companies, bonds, redeemable capital, debt securities, equity securities and collective investment schemes registered as notified entity with the Commission under Non-Banking Finance Companies and Notified Entities Regulations, 2008.
Total investment, at the time of making investment in bonds, redeemable capital, debt securities or instruments issued by a statutory body or listed debt securities, debt collective investment schemes and money market collective investment schemes registered as notified entity with the Commission under Non-Banking Finance Companies and Notified Entities Regulations, 2008, shall not exceed fifty per cent of the size of the fund or trust, as the case may be.
Provided that, total investment in bonds, redeemable capital, debt securities or instruments issued by a statutory body or listed debt securities, debt collective investment schemes and money market collective investment schemes registered as notified entity with the Commission of a particular sector, as per the sector classification made by the Pakistan Stock Exchange, shall not exceed twenty percent of fifty percent of the size of the fund at the time of making such investment;
(3) total investment, at the time of making investment in listed equity securities and equity collective investment schemes, registered as notified entity with the Commission under Non-Banking Finance Companies and Notified Entities Regulations, 2008, shall not exceed thirty per cent of the size of the fund or trust, as the case may be.
Provided that, total investment in listed equity securities and equity collective investment schemes, registered as notified entity with the Commission of a particular sector, as per the sector classification made by the Pakistan Stock Exchange, shall not exceed ten percent of thirty percent of the size of the fund at the time of making such investment, the SECP said.
The aggregate investment in bonds, redeemable capital, debts securities or instruments issued by a particular statutory body or in listed debt securities of a particular company shall not exceed ten per cent of the investment limit provided in clause (2) of Regulation 3, as the case may be, or five per cent of that issue, whichever is lower.
The aggregate investment in bonds, redeemable capital, debt securities or instruments issued by a constituting statutory body or listed debt securities of constituting company or its associated companies out of fund or trust, as the case may be, shall not exceed five per cent of the investment limit provided in clause (2) of Regulation 3 as the case may be.
The aggregate investment in listed equity securities of a particular company shall not exceed five per cent of the investment limit provided in clause (3) of Regulation 3 or five per cent of the paid up capital of the investee company whichever is lower;
The aggregate investment in listed equity securities of constituting company or its associated companies out of fund or trust, as the case may be, shall not exceed five per cent of the investment limit provided in clause (3) of Regulation 3, as the case may be.
The aggregate investment in money market collective investment schemes managed by a single asset management company shall not exceed ten per cent of the investment limit provided in clause (2) of Regulation 3, as the case may be.
The aggregate investment in any single equity collective investment scheme shall not exceed five per cent of the investment limit provided in clause (3) of Regulation 3, as the case may be.
The aggregate investment in initial public offers (IPO) of equity securities shall not exceed five per cent of the investment limit provided in clause (3) of Regulation 3, as the case may be, every six months in a calendar year;
Provided that, the aggregate investment in one IPO of equity securities shall be restricted to one per cent of paid-up capital of the investee company or two per cent of the investment limit provided in clause (3) of Regulation 3, whichever is lower, the SECP added.
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