ISLAMABAD: Securities & Exchange Commission of Pakistan (SECP) has issued the draft bill of amendments in the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980, to obtain the feedback of the public and stakeholders.
According to a statement issued here by the commission, the proposed amendments intended to reflect the rapid and extensive changes in the business of Modarabas.
"The SECP feels that in order to promote the Islamic financial services, there is a need to amend the ordinance."
The proposed amendments would strengthen the Shariah compliance by Modarabas and ensure that the systems, procedures and policies adopted by the modaraba were in line with the Shariah principles.
It would also mitigate the reputational and operational risks and enhance the image and operational framework for modarabas as a pure Islamic financial institutions.
The major amendments to the ordinance include prohibition on the use of the word "Modaraba" or any of its derivatives by any person other than a modaraba company to ensure that no one can use the word modaraba for any illegal business activities.
Provisions for empowerment of the modaraba certificate holders have been introduced who will convene annual and extraordinary general meetings.
Further, prohibition has been imposed on deposit raising by modarabas.
Moreover, the appointment of Shariah Advisors by modarabas has been made mandatory.
Provisions have been introduced to make the Shariah advisor's report as part of the annual audited accounts of the modaraba.
The draft amendments have been circulated to all the concerned quarters and have also been placed on SECP's website www.secp.gov.pk.
Relevant comments and feedback may be sent to the SECP by July 22, 2016.
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