SECP barred from registering INGOs

The high-level committee, set up by the Prime Minister to review rules and regulations regarding accreditation and activities of International Non-governmental Organisations (INGOs), has imposed restriction on the Securities and Exchange Commission of Pakistan (SECP) to register the INGOs in future.
During a press conference of Securities and Exchange Commission of Pakistan (SECP) Chairman, Zafar Hijazi here at the SECP Headquarters, senior SECP officials said the SECP has approved action in terms of Section 439 of the Companies Ordinance to strike off names of those INGOs (Foreign Companies) which have failed to file their audited accounts despite notices, hence presumed dormant.
Hijazi said that PM's committee has taken decisions regarding registration of the INGOs. Firstly, SECP is no more allowed to grant any registration to the INGOs. In future SECP will not register any INGO. Secondly, the electronic registration of the INGOs would be done by the Ministry of Interior and memorandum of understanding (MoU) would be signed with the Economic Affairs Division (EAD). Thirdly, a policy document needs to be complied with regards to INGOs.
Out of total 33 INGOs registered with the SECP, the commission has found that 23 INGOs were non-compliant - not regularly filing their requisite documents. Under section 439 of the Companies Ordinance, the SECP is in the process to striking down their names from registers of the commission. The SECP has also written to the State Bank of Pakistan (SBP) to freeze accounts of the non-compliant INGOs. Responding to a query on number of local NGOs operating in the country, SECP official said that over one lakh local NGOs are also operating in the country.
The SECP has made the names of the 23 international NGOs public against whom the commission has initiated action to strike them off the register of companies. Hijazi shared his views that after not complying with the SECP's rules and regulations names of such NGO will be struck off the register of companies. A senior Official of the SECP stated that now, any international NGO who wants to register with the government of Pakistan will have to first go through an electronic registration with the Interior ministry and then sign a MoU with the EAD for undertaking required functions in various sector of their interest. It will take four to five months to complete the process, as every month the commission is sending a notice to them to comply with the rules of the commission. Once they are unresponsive, the commission will strike their names off the companies register, official said.
There are 643 NGOs (including INGOs) registered with the commission. So far, more than 200 NGOs licenses have been revoked by the commission. The SECP's exercise to scrutinise the working and accounts of local NGOs has been extended to INGOs. In this regard, show-cause notices were issued to INGOs that had not filed annual accounts and other overdue returns with the relevant registrars. Based on response of the INGOs regarding these notices and the record already available with the SECP, the state of compliance of the INGOs has remained unsatisfactory. The list of defaulting INGOs has already been shared with the Economic Affairs Division and the Ministry of Interior for information and necessary action.
The SECP data (NGOs licensed under section 42 of the Companies Ordinance) revealed that the number of companies as on the cut-off date 31.12.2014 stood at 643; companies required renewal of license on completion of five years on the cut-off date are 423 and companies which renewal of license was not due on the cut-off date are 220.
Under first phase, 108 companies failed to apply for renewal/didn't file a single return in last five years and their licenses were revoked; 100 companies didn't apply for renewal but has filed few documents in the previous five years and their licenses were revoked; companies applied for renewal of license are 193; state owned enterprises are 20; license renewed are 39 and license renewal in process are 154. Under second phase, 220 companies where renewal is not due but examination of their corporate compliance and action for non-compliance is in progress at CROs which will be completed in 15 working days, SECP official added.
The names of these 23 INGOs registered with the commission as foreign companies include, Save the Children, Japan, the British Council, American Institutes for Research in the Behavioural Sciences, Al Ehya Trust, Albion Pakistan Inc, Association of National Development Finance Institutions in Member Countries of Islamic Development Bank, CAG Ogretim Isletmeleri A.S.
Others are Education Development Center, Ins; Global Partner; Global Relief Foundation Inc; Goal; HTSPE Ltd; International Relief and Development, Inc; Overseas Development Corporation; Pinnacle Education Services, LLC; Registered Non-profit Organisation JEN; The International Development Organisation; Third World Development Organisation; War Child; World Education Ins; Co-operative Housing Foundation; HMD International Response and Human Concern International.