The Securities and Exchange Commission of Pakistan (SECP) has issued an S.R.O.1233 (I)/2019 to amend Non-Banking Finance Companies and Notified Entities Regulations 2008.
According to the SRO, every Asset Management Company (AMC) must have at least one investment committee which will be responsible for selecting and developing appropriate investment and risk management strategies for the proper performance of the Collective Investment Schemes (CISs).
An employee at an AMC shall not hold office as an employee in another AMC or hold any office including that of a director of another AMC and engage in brokerage services.
A non-banking financial company (NBFC) shall ensure compliance with the following requirements while appointing independent directors on its board:
- Independent directors shall be selected from the data bank notified by the Commission in accordance with section 166 of Companies Act 2017.
- The independent directors shall be elected in the same manner as shareholder directors are elected in accordance with section 159 of the Companies Act 2017.
Under the revised regulations, Listed Companies (Code of Corporate Governance) Regulations 2019 shall be applicable to AMCs and deposit-taking NBFCs provided that the commission may exempt any specific NBFC or class of NBFCs from this regulation.
SECP said that for an NBFC engaged exclusively in the business of issuance of guarantees to enhance the quality of debt instruments issued to finance infrastructure projects in Pakistan, the total outstanding exposure (fund based and non-fund based) by an NBFC to a person shall not, at any time, exceed 40 percent of the equity (as disclosed in the latest financial statements).