ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has amended its regulations to facilitate ease of doing business and expand the investor base, a statement said on Tuesday.
SECP notified amendments to the Securities and Futures Advisers (Licensing and Operations) Regulations, 2017, aiming to develop a resilient market for the advisers. The revamp would also help in improving financial inclusion, the regulator said.
One of the significant facilitations provided is reduction in financial resource requirement for securities and futures advisers applying for a license as a distributor to Rs500,000 in the case of a company and Rs250,000 for individuals.
SECP has also eliminated a requirement on sponsors of securities and futures advisers to collectively hold shares of 51 percent or 25 percent shares in case of listed company.
“The introduced amendments align the existing regulations with market developments and eliminate redundancies to facilitate ease of doing business,” SECP statement said.
In addition, scheduled banks, microfinance banks, non-bank microfinance companies, and electronic money institutions are exempted from obtaining a separate license as a distributor.
The notified regulations enable the distribution of voluntary pension funds offered by pension fund managers other than asset management companies and allows compensation in capacity of distributor to be received from AMC’s/pension fund manager barring distributor charging any advisory fees from clients related to distributions services.
For digital advisory/distribution platforms, the regulations now include requirements for compliance with data protection and cyber security. The amendments also introduced a need for 15 days prior intimation to the commission before launching a platform and submission of information regarding existing digital platforms.
To further decrease regulatory burden, a single consolidated affidavit is provided. Excessive documentation requirements in Annexure-B of the regulations have been removed.
SECP has rationalised the fit and proper criterion and inserted a new Annexure-C relating to contents of the Standard Distribution Agreement for distributors.