Central depository: Financial resource requirements revised for licence seekers

The Securities and Exchange Commission of Pakistan (SECP) has revised a few financial resource requirements for the applicants seeking license of central depository from the commission. The SECP has issued SRO 994(I)/2018 here on Friday to amend the Central Depository (Licensing & Operations) Regulations 2016.
For the purpose of these regulations, now the net worth shall be calculated as total assets less total liabilities of the applicant under the financial resource requirements of licensing for central depository, the SECP said.
Earlier, for the purpose of these regulations, net worth shall be calculated as total assets less total liabilities less surplus on revaluation, if any, created upon revaluation of fixed assets.
The SECP has also amended the conditions of licensing for central depository. Under the revised conditions of licensing for central depository, the SECP said that a central depository may carry out such activity which is not incidental to functions of a central depository directly or by forming subsidiary (ies), as may be allowed by the Commission and subject to such conditions as may be imposed.
The SECP has omitted the proviso from the Central Depository (Licensing & Operations) Regulations 2016 that provided further that, subject to the approval of the Commission, a central depository may carry out such activity which is not incidental to functions of a central depository, by forming subsidiary (ies) subject to the approval of the Commission for formation of such subsidiary (ies) and investment in such subsidiary (ies).
The SECP has also omitted the proviso from the Central Depository (Licensing & Operations) Regulations 2016 that provided further that a central depository registered with the Commission prior to commencement of these regulations shall be required to transfer any such activity which is not incidental to its functions as a central depository to its subsidiary company (ies) within one year from the date of grant of license under these regulations.
The SECP has omitted the above two proviso from the Central Depository (Licensing & Operations) Regulations 2016.
Following is the text of the SRO issued here on Friday by the SECP: SRO 994 (I)/2018.- In exercise of the powers conferred by section 169(1) read with sections 48, 49, 50, 59, 60, 61 and 151 of the Securities Act, 2015 (III of 2015), the Securities and Exchange Commission of Pakistan hereby makes the following amendments in the Central Depository (Licensing & Operations) Regulations 2016, the same having been previously published in the official Gazette vide SRO 489(I)/2018 dated July 2, 2018 and SRO 882(I)/2018 dated July 10, 2018 and placed on the website of the Commission as required under sub-section (4) of the said section 169, namely:-
In the aforesaid Regulations,
(i) in regulation 5, in clause (l),-
(a) in the first proviso, after the expression "central depository" appearing for the second time, the expressions " directly or by forming subsidiary (ies)," shall be inserted; and
(b) second and third provisos shall be omitted.
(ii) in regulation 6, the words "less surplus on revaluation, if any, created upon revaluation of fixed assets" shall be omitted, it added.