The Securities and Exchange Commission of Pakistan (SECP) has made it mandatory for the professionals working in the Non-Banking Finance Companies (NBFCs) to comply with the applicable certification requirement.
In this regard the SECP has issued circular number 11 of 2015 here on Thursday and superseded circular No.35 of 2009 dated October 30, 2009. The new circular will come into force with immediate effect and all referred NBFCs are required to ensure its meticulous compliance in letter and spirit.
According to the SECP, in order to develop human capital in the financial markets and building investor confidence by enhancing professional competence of individuals working in these markets, the SECP, in exercise of the powers conferred under Section 282B (3) of the Companies Ordinance, 1984, directs the NBFCs to ensure compliance with the said requirements:
(A) For leasing companies and investment finance companies: All existing employees of these NBFCs who are engaged in the following activities related to securities will obtain Pakistan Markets and Regulations Programme (PMR) and Fundamentals of Capital Market (FCM) certifications currently being offered by ICM within 18 months of issuance of the circular.
1. Investment management: - those managing the portfolio of securities including all members of investment committees.
2. Operations and settlement: - those responsible for execution and settlement for trades in securities.
3. Research: - those carrying out fundamental analysis of all existing and potential investment in securities.
4. Compliance: - those responsible for ensuring compliance with applicable securities business regulatory requirements.
5. Risk: - those responsible to ensure that securities investments are within a desirable level of risks.
All new employees joining these NBFCs after the date of the issuance of this circular and engaged in the activities as stated above shall obtain PMR and FCM certification within 12 months of their joining.
(B) For Asset Management Companies, Pension Fund Managers and Investment Advisors: All existing professionals engaged in or employed by these NBFCs for the following activities shall obtain Pakistan Markets and Regulations Programme (PMR) and Fundamentals of Capital Market (FCM) certifications currently being offered by ICM by June 30, 2016:-
1. Business and product developments: - those responsible for sale (retail/ institutional), marketing, investor relations/services, and product design.
Fund/Investments Management: - those managing the portfolio or investment including all members of investment committees.
2. Operations: - those responsible for fund and client accounting, trustee relations and execution of trades.
3. Settlement: - those responsible for settlement of all trades.
4. Research: - those carrying out fundamental analysis of all existing and potential investment.
5. Compliance: - those responsible for ensuring compliance with applicable business regulatory requirements.
6. Risk:- those responsible to ensure that investments are within a desirable level of risk.
In addition to above certifications, all existing professionals engaged in or employed by these NBFCs for sale of collective investment schemes or pension funds with or for an NBFC shall obtain the Mutual Fund Distributors Certification (MFDC) currently being offered by ICM within 18 months of issuance of the circular.
The SECP said that all new professionals joining these NBFCs or a third party engaged by these NBFCs for any of the referred function or activity; after the date of the issuance of this circular, and performing activities referred in para 2(B)(i) above, shall obtain PMR and FCM certifications within 12 months of their joining. However, if a new professional is engaged in sale of collective investment schemes or pension funds, he/she shall obtain MFDC in addition to PMR and FCM certification within 12 months of his/her joining.
The SECP said that professionals desirous of availing certification through grandfathering provision should approach ICM for details and this provision will lapse after December 31, 2015. The NBFCs shall ensure that their employees who obtain certification through exam or grandfathering shall comply with all certification requirements.
All the professionals working with or working for the NBFCs in respect of above defined activities shall comply with the applicable mandatory certification requirement. It shall be responsibility of NBFCs to ensure compliance of above requirements by any third party to whom any of the above mention function or activity has been delegated, the SECP added.
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