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The Securities and Exchange Commission of Pakistan (SECP) has issued the qualified capital and its terms and conditions for the Non-Banking Finance Companies (NBFCs) engaged exclusively in the business of issuance of guarantees to enhance the quality of debt instruments issued to finance infrastructure projects in Pakistan.

In this regard, the SECP has issued circular number 17 of 2019 here on Tuesday. The SECP has defined that the qualified capital means the aggregate of callable capital and contingent capital (including any drawdown thereunder).

According to the SECP, the NBFC shall not take any exposure against the qualified capital unless it has obtained a certificate from its statutory auditor that all the requirements specified above have been compiled with.

The certificate shall be supported by a legal opinion from a reputed law firm and a copy of the certificate along with the legal opinion shall be submitted to the commission.

With regards to its qualified capital, the NBFC, in relevant notes to its financial statements shall make disclosures, which are necessary for the users to understand its salient features, the SECP added.

Copyright Business Recorder, 2019