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April 10, 2020

SECP relaxes regulations for asset management companies

Business

April 10, 2020

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Thursday relaxed certain regulations for asset management companies due to prevailing challenges related to coronavirus pandemic.

The SECP said it allowed the relaxations for three months in relation to compliance with certain requirements of the Non-Banking Finance Companies (NBFC) regulations “due to the prevailing situation and in pursuant to the challenges faced by asset management companies in complying with certain requirements of the NBFC and Notified Entities Regulations, 2008.”

Time period to regularise the exposure limits breach under regulation 55(13) of NBFC Regulations was extended from four to six months.

Time for announcement of daily net asset value as per the requirement of circular no. 11 of 2009 dates March 26, 2009 was extended from 18:30PM to the start of next working day. Time for submission of monthly returns for the month of March 2020 as per the requirement of circular no. 1of 2010 dated January 15, 2020 was extended for 10 days – by April 20, 2020. Maximum limit for application of discretionary discount (as per annexure-I, chapter 3 of circular no. 33 of 2012 dated October 24, 2012) has been enhanced.

The SECP further extended the time period for classification of a debt security to non-performing category from 15 days to 180 days as per the requirement of annexure-II of circular no. 33, dated October 24, 2012.

“Debt securities, which are regular in payment of mark-up, however, deferred the payment of principal for one year as per the agreement shall be treated as performing,” it said in a statement. “Debt securities, which are rescheduled/restructured between these 180 days, shall continue to be treated as performing.”

SECP said the relaxations would stand expired on March 31, 2021 and afterwards prevailing instructions on the subject would be applicable.

The commission said asset management companies might inform investors through text message or email in lieu of account statement to comply with the requirements of circular no. 26 of 2015, dated July 27, 2015.

SECP further extended requirements of obtaining Institute of Financial Markets of Pakistan’s certifications as per circular no. 41 of 2016, dated December 30, 2016 from six months to nine months. Deadline for implementation of circular no. 2, dated February 6, 2020 was extended from further two months.