The Securities and Exchange Commission of Pakistan (SECP) has revised the terms and conditions to undertake asset management services by Asset Management Companies (AMCs). In this regard, the SECP has issued SRO 1170 (I)/2017 to propose amendments to Non-Banking Finance Companies and Notified Entities Regulations, 2008. According to the draft regulations, the SECP has proposed amendment to the terms and conditions to undertake asset management services.
Under the regulations, an asset management company shall not enter, on behalf of a collective investment scheme, into transactions with any broker that exceed fifteen percent of the Commission payable by a collective investment scheme in any one accounting year. Provided that this restriction shall not apply to transactions relating to money market instruments or debt securities.
Provided that this restriction shall not apply to transactions relating to money market instruments or debt securities or Margin Trading System (MTS) or ready future spread transactions where transactions are carried out with minimum two brokers or any other instrument/transaction as may be specified by the Commission through circular.
The regulations pertaining to the details of academic and professional qualifications further revealed that board of directors of NBFC shall ensure verification of credentials and degrees of the chief executive.
The regulations further said that the reverse repo transactions involving government securities or other debt securities stated as authorized investments in the offering document under an agreement and spread transaction through ready buy and future sale or future buy ready sale transaction to unwind the existing spread transaction during the rollover dates or MTS or replacement thereof which are protected by the clearing company shall not be attracted by relevant clause provided risk management parameters are disclosed in the offering document of the scheme, it said.
Following is the text of the SRO 1170 (I)/2017 issued here on Friday: the following draft amendments in 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) are hereby published for the 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.
Draft amendments:
In the aforesaid regulations, (1) In regulation (37) sub-regulation (7) under clause (h), proviso shall be substituted, namely:-
"Provided that this restriction shall not apply to transactions relating to money market instruments or debt securities or Margin Trading System (MTS) or ready future spread transactions where transactions are carried out with minimum two brokers or any other instrument/transaction as may be specified by the Commission through circular."
(2) In regulation (58) sub-regulation (1), under clause (j) for the "Explanation" the following shall be substituted, namely:-
"Explanation,- Reverse repo transactions involving Government Securities or other debt securities stated as authorized investments in the offering document under an agreement and spread transaction through ready buy and future sale or future buy ready sale transaction to unwind the existing spread transaction during the rollover dates or MTS or replacement thereof which are protected by the clearing company shall not be attracted by clause (j) provided risk management parameters are disclosed in the offering document of the scheme;"
(3) In regulation (60), in sub-regulation (5), in clause (c) for semicolon at the
end, a colon shall be substituted and thereafter the following proviso shall be inserted, namely:-
"Provided that in addition to the above prescribed limit income and aggressive income schemes which invest in Margin Trading System (MTS) may charge additional MTS related expenses up to 0.5% of net assets to the scheme;"
(4) In Schedule IX, Annexure-A, for clause (a) sub-clause 1(i) the following shall be substituted, namely:-
"ie details of academic and professional qualifications. The board of directors of NBFC shall ensure verification of credentials and degrees of the chief executive,"
(5) In Schedule IX, Annexure-A, in clause (a) sub clause 1(K), the words "In case of CEO, verification of antecedents from all the previous employers" shall be omitted; and
(6) In Schedule IX, Annexure-A, in clause (a) sub clause (2), for the words "Personal net worth (copy of wealth statement)" the words "Personal net worth (copy of wealth statement for other than nominee directors of body corporate)" shall be substituted.
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