Agri promotion: SECP to register CMCs engaged in warehousing

The Securities and Exchange Commission of Pakistan (SECP) will register the Collateral Management Companies (CMCs) - agriculture promotion companies - to engage in the activities of warehousing, ie, provision of quality storage and preservation services for a range of agricultural commodities.
According to the Collateral Management Companies Regulations, 2019 issued by the SECP Saturday, the CMC means an agriculture promotion company registered with the Commission under these regulations having principal line of business as managing produce as collateral or engaged in any other activity connected with or related to any produce or any other activity as may be notified by the Commission.
The scope of activities of a CMC revealed that the CMC may engage in the activities of warehousing, ie, provision of quality storage and preservation services for a range of agricultural commodities. Provided that a CMC shall not own a warehouse without prior written approval of the Commission, subject to such terms and conditions as it may deem fit.
The CMC may engage in the activities of issuance of warehouse receipts for agricultural commodity financing; devise a mechanism for pledging, in favour of eligible pledgee, the depositor''s produce held with the warehouse operator against which electronic warehouse receipt has been issued; stock audit, evaluation and verification services; accreditation of warehouses and any other activity as approved by the Commission.
The regulations have specified that a person desirous of forming a CMC shall make an application for permission of the Commission subject to the laid down terms and conditions. The principal line of business of the applicant will be related to managing produce as collateral or engaged in any activity connected with or related to produce or other related activities.
The applicant undertakes to invest a minimum paid-up capital of Rs 200 million or such higher amount as may be specified by the Commission from time to time.
The applicant undertakes to secure necessary infrastructure including but not limited to adequate office space, equipment, electronic warehouse receipt system and control procedures and such other condition as may be notified by the Commission.
The Commission may permit by an order in writing to establish a CMC if it is satisfied that the person seeking permission to form a CMC has provided the information as required.
The permission granted, shall be valid for a period of six months unless extended for a further period as approved by the Commission under special circumstances, on the application of the promoters made before the expiry of initial six months. During the validity of this permission, the promoters shall get the company incorporated as a public limited company and submit an application to the Commission for grant of registration as a CMC, after fulfilling all the conditions specified in these regulations, the SECP added.