ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) will allow 'Not for Profit' Organisations (NPOs) to obtain registration as a self-regulatory organization - an entity connected with financial services market for regulating operations, standards of practice and business conduct of its members to promote protection of investors and the public interest.
According to the draft "Self-Regulatory Organizations (Registration) Regulations, 2021" issued by the SECP, any company licensed under Section 42 of the Companies Act, 2017, desirous of obtaining registration as a self-regulatory organisation, may make an application to the Commission.
The applicant should be a company licensed by the Commission under Section 42 of the said Act.
The Commission may, after making necessary inquiries and after obtaining further information, as it may consider necessary, grant registration for one or more functions related to the financial services market or the corporate sector.
The registration certificate to be issued by the SECP revealed that, "the applicant is eligible for registration as a Self-Regulatory Organization and that it would be in public interest and in the interest of financial services market or corporate sector to do so, hereby grants registration certificate".
Under Section 36D of the "Securities and Exchange Commission of Pakistan Act, 1997", the self-regulatory organisation shall be responsible to perform the functions which may include effective training and education of the members of self-regulatory organisation and investors in general; conducting examinations and providing certifications to its members and investors in general; providing research and development assistance to its members and investors in general; conducting the grading of its members with respect to their compliance with the applicable law and other norms as may be specified; providing information to the investors regarding general and specific risks of financial services market, information pertaining to its members and other information useful for taking informed investment decisions and protecting the interest of investors; and any other functions as may be specified.
Under the draft Self-Regulatory Organizations (Registration) Regulations, 2021, a self-regulatory organisation shall prepare and maintain such books of accounts as required under the Companies Act, 2017, including records that shall depict a true and fair view of its state-of-affairs for the last 10 years.
The registration certificate granted will be subject to the following conditions: The requirements of Section 36D of the Act are complied with.
Each of its promoters, directors, chief executive and chairman of the board of directors fulfils the terms and conditions mentioned in the fit and proper criteria specified.
The company shall not make any change in the Memorandum of Association, other than increase in the authorised share capital, without prior approval of the Commission.
The company shall furnish evidence to the satisfaction of the Commission that the personnel employed by it for executive positions, research or other related functions possess sufficient educational qualifications and professional experience to undertake the proposed self-regulatory function(s) within 90 days of grant of registration.
The company, its promoters and major shareholders, its chief executive and its directors shall furnish separate undertakings to the Commission that they shall comply in letter and spirit with the requirements of the Act or administered legislation and the rules, regulations or directions made thereunder, the SECP added.
Copyright Business Recorder, 2021
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