In order to facilitate stock market intermediaries, including securities advisers, the Securities and Exchange Commission of Pakistan (SECP) would be allowed to extend time period for seeking licenses from the Commission. Sources told Business Recorder here on Thursday that the SECP has proposed amendment to the Securities and Futures Advisers (Licensing and Operations) Regulations, 2017.
According to sources, the securities and futures advisers (Licensing and Operations) Regulations, 2017 were earlier notified on April 21, 2017. The regulations require that any person performing functions of a securities adviser or distribution of collective investment schemes and/or voluntary pension fund units of multiple asset management companies under contract before coming into force of the regulations, shall be required to obtain licence as a securities adviser within a period of six months from the date of coming into force of the regulations.
The SECP received a request from the Mutual Funds Association of Pakistan (MFAP) for extension in timeline up till December 31, 2017 to distributors selling multiple AMC products for application of license as securities adviser under the regulations. The MFAP has explained that some of distributors, particularly banks, are facing difficulty in meeting the requirement within the timeline given in the regulations, as they need their board approvals to apply for the license and complete the process and would not be able to complete the same by the deadline.
Moreover, the brokers are required to seek licenses as a securities adviser under the regulations within the same timeline. However, a number of brokers are yet in process of completing the requirements. Hence, the amendments are being carried out in the said regulations which are currently in public consultation phase, through SRO No. 1162(I)/2017, dated November 6, 2017, to provide flexibility to the Commission in extending the timeline for market intermediaries obtaining license. Post final promulgation of the amended regulations the Commission will notify the extended timeline. It must be noted that the regulation has been introduced for the first time in Pakistani market just this year under the Securities Act, 2015 and Futures Market Act, 2016. Hence, the SECP being conscious of this fact, keeping in view practical difficulties being faced by the market intermediaries and to facilitate the market will be extending the timeline for licensing, sources added.