SECP relaxes major provisions of NBFCs

The Securities and Exchange Commission of Pakistan (SECP) on Friday relaxed major provisions of the Non-Banking Finance Companies and Notified Entities Regulations, 2008 to facilitate the asset management companies during the coronavirus pandemic.

According to circular number 11 of 2020 issued by the SECP, the COVID-19 (coronavirus) has affected many businesses around the world and has been declared as a pandemic.

Due to the prevailing situation and in pursuant to the challenges faced by the asset management companies in complying with certain requirements of the Non-Banking Finance Companies and Notified Entities Regulations, 2008 (the "NBFC Regulations"), the SECP in exercise of the powers conferred under Section 282B(3) of the Companies Ordinance, 1984 read with sub-regulation 67(A) of the NBFC Regulations hereby allows the following relaxations for 90 days or as mentioned below in relations to compliance with certain requirements of the NBFC Regulations and circulars issued thereunder: First, the time period to regularize the exposure limits breach under Regulation 55(13) of the NBFC Regulations is extended from four months to six months.

Second, the time for announcement of daily NAV as per the requirement of Circular No 11 of 2009 dated March 26,2009 is extended from 18:30pm to the start of next working day.

Third, the time for submission of monthly returns for March 2020 as per the requirement of Circular No 1 of 2010 dated January 15, 2010 is extended for 10 days, i.e. by April 20, 2020.

Fourth, the maximum limit for application of discretionary discount as per Annexure-1, Chapter 3 of Circular No 33 of 2012 dated October 24, 2012 has been enhanced.

The SECP stated that the time period for classification of a debt security to non-performing category was extended from 15 days to 180 days as per the requirement of annexure-II of Circular No 33/2012 dated October 24, 2012.

Debt securities, which are regular in payment of mark up, however, deferred the payment of principal for one year as per the agreement shall be treated as performing.

Debt securities, which are rescheduled/restructured between these 180 days shall continue to be treated prevailing instructions on the subject shall be applicable.

Fifth, the AMCs may inform investors through SMS or email in lieu of account statement to comply with the requirements of Circular No 26 of 2015 dated July 27, 2015.

Sixth, the requirements of obtaining IFMP certifications as per Circular No 41 of 2016 dated December 30, 2016 is extended from six months to nine months.

Seventh, the deadline for implementation of Circular No 2 of 2020 dated February 6, 2020 is extended for further 60 days, the SECP added.