The Securities and Exchange Commission of Pakistan (SECP) has specified that any instrument of redeemable capital of the government including Government Debt Securities can be issued to an individual investor, besides securities brokers, Funds/Trusts and company/body corporate. In this regard, the SECP has issued SRO 1300 (I)/2018 here on Thursday.
According to the notification, in exercise of the powers conferred under Companies Act, 2017, the SECP has notified following persons to whom any instrument in the nature of "redeemable capital" may be issued by a company subject to the terms and conditions as provided in section 66 of the Act, namely: a Securities Broker; a Fund and Trust as defined in the Employees Contributory Funds (Investment in Listed Securities) Regulations, 2018 and a Company and Body Corporate as defined in the Companies Act, 2017.
Provided that any instrument of redeemable capital of the government including Government Debt Securities can be issued to an individual investor in addition to the persons mentioned to above. "Government Debt Security" means a debt security such as Treasury Bill (T-Bill), Pakistan Investment Bond (PIB), Government of Pakistan (GoP) Ijara Sukuk and any other debt instrument issued by the federal government, provincial government, local government/authority and any other statutory body, the SECP added.
Under relevant section 66 (issue of securities and redeemable capital not based on interest) of the Companies Act, a company may by public offer or upon terms and conditions contained in an agreement in writing issue to one or more scheduled banks, financial institutions or such other persons as are notified for the purpose by the Commission either severally, jointly or through their syndicate, any instrument in the nature of redeemable capital in any or several forms in consideration of funds, money or accommodations received or to be received by the company, whether in cash or in specie or against any promise, guarantee, undertaking or indemnity issued to or in favour of or for the benefit of the company.
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