SECP Proposes New Law for Non-Banking Finance Companies

The Securities and Exchange Commission of Pakistan (SECP) has proposed a new law called, Non-Banking Finance Companies and Collective Investment Vehicles Bill, 2020, in order to protect investors and tighten supervision/ monitoring of non-banking finance companies and collective investment vehicles.

According to the Non-Banking Finance Companies and Collective Investment Vehicles Bill, 2020, the rationale of the new law is that it is expedient to enact a law to provide for the beneficial regulation of nonbanking finance companies and collective investment vehicles, development of a robust nonbanking financial sector and the protection of investors and matters connected therewith and incidental thereto.

The scope of the NBFCs forms of business covers the following activities or business –

• Agriculture finance services;
• Asset management services;
• Collateral management services;
• Discounting services;
• Housing finance services;
• Investment advisory services;
• Investment finance services;
• Leasing;
• Non-banking microfinancing services;
• Pension fund scheme business;
• Private equity and venture capital fund management services;
• Real estate investment trust (REIT) management services;
• Any other regulated form of business as may be notified by the Federal Government

You can read the draft here.