The Securities and Exchange Commission of Pakistan (SECP) has released guidelines for the issuance of Gender Bonds to increase the financial inclusion of women and to encourage female entrepreneurship.
The guidelines that were issued pursuant to Section 172 of the Securities Act, 2015, aim to facilitate companies and issuers of debt securities to diversify their sources of financing and to provide an additional financial instrument to a particular class of investors.
As a step towards the promotion of gender equality, the issuance of gender bonds will improve women’s access to leadership positions and gender-positive corporate policies.
As per the gender bond guidelines, all the issuers who are eligible to issue debt securities, including Sukuk bonds, either by way of a public offer or private placement, are also eligible to issue Gender Bonds as long as they ensure compliance with the applicable regulatory framework.
The amount of funds raised from the issuance of gender bonds will be utilized to finance projects related to the uplifting of women and economic empowerment such as the access to finance/credit; micro, small, and medium-sized enterprise development; agriculture development; financial literacy and entrepreneurship training, disaster risk management; and housing for the low-income segment of women, etc.
Similar to other debt instruments like green, social, and sustainability bonds, a gender bond can have any type of financial structure like a general bond, a project bond, or a securitization scheme.
Gender bonds are a relatively recent development that are still nascent in the field of finance. Internationally, gender-labeled bonds have been issued by a variety of entities ranging from large commercial banks to NGOs, and to multilateral development banks.
Most gender bonds issued have relied on the Institute of Capital Market Association (ICMA)’s Social Bond Principles, the UN’s Sustainable Development Goals (SDGs), or the UN Women’s Empowerment Principles as reference standards.
The gender bond guidelines are available on the SECPs website.