ISLAMABAD (September 13 2006): The Securities and Exchange Commission of Pakistan (SECP), under revised Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 (NBFC Rules), has proposed single licensing regime for activities in leasing, investment finance services and housing finance services.
The SECP on Tuesday notified draft amendments to the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 (NBFC Rules). The rules have been placed on the SECP website (www.secp.gov.pk) to solicit comments and feedback from the public.
According to the SECP, the revisions to NBFC Rules have been made 'in house' at SECP in line with international best practices and feedback from market participants at various stages. The amendments have been drafted keeping in view the recent developments in the financial sector.
Accordingly, a single licensing regime will be introduced for activities in leasing, investment finance services and housing finance services under the revised rules. Similarly, NBFCs seeking to undertake investment advisory services and asset management services will also be able to obtain a single licence for both activities. Moreover, the draft amendments dub and augment the legal provisions governing the investment advisory and asset management services, the SECP stated.
The amendments further address practical difficulties being faced by NBFCs to ensure rules' compliance. To strengthen risk management and investor-confidence, the disclosure requirements for companies seeking to raise public deposits by way of Certificates of Deposit are also being enhanced. Additionally, in order to ensure strong corporate governance in the NBFC sector, the concept of a 'Fit and Proper Criteria' has been introduced for directors and key executives.
The SECP expects that the draft amendments would provide regulatory flexibility and structure for continued healthy growth of the sector. Comments and feedback on these amendments may be forwarded to SECP on the following address within 30 days of notification of the draft by the Federal Government.
Ms Ayesha Tanvir, Assistant Director, Non-Banking Finance Companies Department, Securities and Exchange Commission of Pakistan, 5th Floor, NIC Building, Blue-Area, Jinnah Avenue, Islamabad.
