SECP, FBR relax different regulatory deadlines

To facilitate companies and businesses in dealing with the current crises due to the COVID-19 pandemic, the Securities and Exchange Commission of Pakistan (SECP) and the Federal Board of Revenue (FBR) has relaxed different regulatory deadlines, extended sales tax return filing due dates, and facilitated tax payments during the last one week.
A senior corporate lawyer and Vice President, Pakistan Tax Bar Association (RITBA) Syed Tanseer Bukhari told Business Recorder that the SECP had taken facilitative measures and had extended regulatory deadlines, but the commission should also be stopped from issuing inspection notices to undertakings during this crisis-like situation where the whole country was locked down.
He stated that the Corporatisation and Compliance Department, Company Law Division issued an inspection notice (dated March 19, 2020) to an undertaking under Section 221 of the Companies Act, 2017, for compliance within a week's time.
The SECP chairperson should take notice of the situation and issue instructions to its departments to avoid issuance of such notices during current situation where companies' offices were totally closed.
The FBR had extended dates of payment/submission of sales tax and federal excise returns along with Annexures for the tax period of January, 2020 and February, 2020.
The due date for submission of return for the tax period of January 2020 was extended up to April 15, 2020.
The payment date for return (tax period February 2020) was extended up to March 31, 2020 and submission date for filing of monthly sales tax return (tax period February 2020) was extended up to April 15, 2020.
The FBR has provided facility to make payment of customs duty, income tax, sales tax and the federal excise duty through alternate delivery channels (ADC) including internet banking; ATMs; mobile banking (Jazz cash etc) and over the counter from all the branches of all the scheduled banks.
The SECP has given different relaxations in relation to compliance with requirements of the Companies Act: (I) All companies, which are facing difficulties in timely holding the annual general meeting (AGM) for the year ended on December 31, 2019, are allowed a general extension for a period of 30 days as provided in Section 132 of the Act for holding their AGMs. The companies can now hold their AGM for the year ended on December 31, 2019, on or before May 29, 2020.
(II) The companies, whose election of directors is due before or in the aforesaid AGM, may file impediment reports with the concerned registrar under section 158(2) of the Act citing the reasons for the delay in holding the election of directors.
(III) Accordingly, any statutory return, which is required to be filed on or after 24th March 2020, may be filed with the concerned registrar with the delay of 30 days of the occurrence of any event without any additional filing fee as no penal action shall be taken for the late filing.
In COVID-19 situation, the SECP' is endeavoring to perform its regulatory functions efficiently.
The SECP's response to the COVID-19 is focused on the health and safety of business workforce all over Pakistan and maintaining the continuity of economic activity.
To address challenges being faced by the corporate sector and the capital markets participants, the commission and its officers held various meetings over the past week and over the weekend, through digital means, with a wide array of market participants.
These led to a number of actions to facilitate businesses in dealing with the current crises.
Among them are relaxation of regulatory deadlines under
Companies Act 2017, a mock trading session at PSX on the 23rd March, and Government of Sindh's inclusion of SROs of Capital Market among "Essential Services", upon the SECP's request.
These steps enabled the PSX to trade smoothly.
Likewise, in a historic development, Pakistan's first ever exchange traded fund was launched.
Amid all the difficulties associated with the COVID-19, these measures demonstrate our unflinching commitment to progress, and being sensitive to the needs of our regulated sectors.
The SECP, as corporate sector regulator, advised all companies to divert their Corporate Social Responsibility (CSR) activities and budget for the COVID-19 prevention, detection and cure including by generously contributing towards research and development activities related to the COVID-19.
The SECP invites attention of companies' board of directors toward their social responsibilities, enshrined in Section 204 (2) of the Companies Act, 2017; "A director of a company shall act in good faith in order to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees the shareholders the community and for the protection of environment.'
Since, the outbreak of the coronavirus disease (COVID-19) is threatening the global economies, it is high time for the corporates in Pakistan to rise to the occasion and address their responsibility.
Companies are advised to take proactive measures to ensure effective contingency planning for financial and business continuity; mitigate health risks to employees, customers and communities.
They should prevent premises from becoming a node of the COVID-19 transmission and ensure that adequate plans and means are in place.
They should also ensure alternative arrangements with suppliers and customers so that business operations can continue.
Moreover, the SECP has relaxed the regulatory deadlines under the Companies Act.
1. All companies, which are facing difficulties in timely holding the annual general meeting (AGM) for the year ended on December 31, 2019, are allowed a general extension for a period of 30 days as provided in Section 132 of the Act for holding their AGMs. The companies can now hold their AGM for the year ended on December 31, 2019 on or before May 29, 2020.
The companies, whose election of directors is due before or in the aforesaid AGM, may file impediment reports with the concerned registrar under section 158(2) of the Act citing the reasons for delay in holding the election of directors.
Accordingly, any statutory return, which is required to be filed on or after 24th March, 2020 may be filed with the concerned registrar with the delay of 30 days of occurrence of any event without any additional filing fee as no penal action shall be taken for the late filing.
The SECP has also issued guidance to insurance companies for imparting maximum facilitation to insurance policyholders and claimants during this difficult time.
The SECP asked insurance companies to use digital or online payment modes for receipt of insurance premium and disbursement of claim payments.
Insurers have been advised to consider utilisation of electronic mediums such as SMS, emails, WhatsApp or mobile phones etc. For handling claims, delivery of policy documents, and issuance of pre-authorizations for treatment in hospitals.
Insurers have been further advised to consider waiving off non-mandatory documentary requirements for claims processing and have been encouraged to use alternative methods for verifying the authenticity of claims in case claimants are unable to furnish a particular document due to unavoidable circumstances.
The SECP has also simplified submission requirements for registration of a new life insurance product or registering any amendments in an existing product. As per circular, a life insurance company that intend to issue a new product, which is likely to be a standard product, it would require submitting very brief information.
The SECP has also simplified submission requirements for registration of a new life insurance product or registering any amendments in an existing product.
As per circular, a life insurance company that intends to issue a new product, which is likely to be a standard product, it would require submitting very brief information.
The SECP has also reduced the turnaround time, for registration of insurance products to 7 days, from earlier duration of 30 days.