ISLAMABAD: The Securities and Exchange Commission of Pakistan has issued draft of amendments in the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 for public consultation.
In order to promote an enabling business environment and provide ease of doing business, the SECP, through these amendments, has proposed introduction of perpetual license for Non-banking finance companies by replacing the existing requirement of renewal of license after every three years. The SECP has also proposed to allow a single Non-Banking Finance Company to undertake different licensed activities. Moreover, the lending NBFCs will be required to obtain Private Equity and Venture Capital (PE&VC) license while, the Investment Advisors will be allowed to manage and launch exchange traded funds and listed collective investment schemes. Moreover, to encourage formation of new NBFCs, a more rationalized procedure to seek Commission’s permission to form a NBFC and obtain relevant NBFC license has been proposed.
Draft amendments also streamline the requirements regarding sponsors and majority shareholders of NBFCs. It proposes that only first-time promoters shall be considered as sponsors while the person replacing a sponsor and holding less than 10% shares will not be required to obtain approval of the SECP. The requirement of blocking of shares is proposed to be applicable only when a person holds 10% or more shareholding. Necessary provisions have also been introduced regarding specification of capital adequacy requirements or any other requirement in addition to or in lieu of the minimum equity requirements for any form of business.