The Securities and Exchange Commission of Pakistan (SECP) has revised conditions for grant of license or its renewal to non-profit associations under Section 42 of the Companies Ordinance, 1984. In this regard, the SECP has issued circular 28 of 2015 dated August 10, 2015.
According to the amended procedure, while processing a case for grant of licence to an association or renewal thereof, CIB Reports of promoters or directors and chief executive as the case may be, shall be called from State Bank of Pakistan and the persons whose CIB Reports show total overdue amounts exceeding Rs 500,000 shall not be allowed to act as promoters or directors or chief executive of the association, it added.
Sources added that the SECP has observed that these CIB Reports often indicate small amounts of overdue loans due to which promoters were advised either to get clearance from the creditors/banks and secure clear CIB report or to exclude such promoters. Due to this practice, promoters of associations were facing a lot of difficulties. The condition is now revised and the persons whose CIB Reports show total overdue amount exceeding Rs 500,000 shall not be allowed to act as promoter or directors or chief executive of the association. Through circular 28 of 2015, the SECP has deleted the condition regarding submission of evaluation report mentioned in circular 4 of 2015. The SECP has also deleted condition of letter from PCP confirming that the association has applied for such evaluation report as per circular 5 of 2015.
Following is the text of the circular 28 of 2015: The Securities and Exchange Commission of Pakistan has partially modified its Circular No 12/2011 dated 19.8.2011, Circular No 4 of 2015 dated 30.1.2015 and Circular No 5 of 2015 dated 30.1.2015, pertaining to the conditions and requirements for grant of licence or renewal thereof under section 42 of the Companies Ordinance, 1984, in the following manner:
(i) Sub-para (d) of para 1 of the Circular No 12/2011 dated 19.8.2011 shall be substituted to read as under: "While processing a case for grant of licence to an association or renewal thereof, CIB Reports of promoters or directors and chief executive as the case may be, shall be called from State Bank of Pakistan and the persons whose CIB Reports show total overdue amounts exceeding Rs 500,000, shall not be allowed to act as promoters or directors or chief executive of the association." (ii) Sub-clause (g) of Clause (i) of Para 1 of Circular No 4 of 2015 dated 30.1.2015 shall stand deleted; and (iii) Sub-clause (i) of Para 1 of Circular No 5 of 2015 dated 30.1.2015 shall stand deleted, circular added.