Accredited investors: Cos can issue redeemable capital type instrument: SECP

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has allowed companies to issue any instrument in the nature of redeemable capital to the accredited individual investors.

The accredited individual investor means an individual investor registered with the National Clearing Company of Pakistan Limited and having net assets of Rs5 million or more.

In this regard, the SECP has issued SRO 1011(I)/2021, here on Thursday to supersede previous notification SRO 492 (I)/2021, dated April 19, 2021.

According to the notification, the SECP has notified the following persons to whom any instrument in the nature of "redeemable capital" may be issued by a company: (i) Mutual funds, Voluntary Pension Schemes and Private fund being managed by the NBFC; (ii) Insurer registered under the Insurance Ordinance, 2000; (iii) a Securities Broker; (iv) a Fund and Trust as defined in the Employees Contributory Funds (Investment in Listed Securities) Regulations, 2018; (v) a Company and Body Corporate as defined in the Companies Act, 2017; (vi) all individual investors including accredited individual investors, in case of Government Debt Securities, and debt securities whose debt servicing is guaranteed by the Government; (vii) accredited individual investors, in case of corporate debt instruments excluding additional Tier I and Tier Il capital instruments.

Provided that the company shall ensure that the instrument is not placed to more than 50 accredited individual investors; information memorandum contains all applicable information/disclosures as prescribed under the Public Offering regulations, 2017 and instrument is not sold to non-accredited investors in secondary market.

For the purposes of this notification the expressions, - "accredited individual investor" means an individual investor registered with the National Clearing Company of Pakistan Limited and having net assets of Rs5 million or more; and "Government Debt Securities" means a debt security such as Treasury Bill (T-Bill), Pakistan Investment Bond (PIB), Government of Pakistan (GOP) Ijarah Sukuk and any other debt instrument issued by the federal government, provisional government, local government/authority, and any other statutory body.

Copyright Business Recorder, 2021