Regulatory Alerts2023-11-02
Added · Updated
Amendments to the Associations with Charitable and Not for Profit Objects Regulations, 2018
The Securities and Exchange Commission of Pakistan amends the Associations with Charitable and Not for Profit Objects Regulations, 2018, to impose Shariah compliance requirements on companies. Regulation 7 is updated to prohibit the exploitation of religious susceptibilities and to mandate that Islamic donations, such as zakat and sadaqah, are not utilized in ways contrary to Shariah principles, requiring a registered Shariah Advisor's Fatwa to be annexed to audited financial statements. Additionally, new sub-regulation 1A to Regulation 13 requires companies to clearly disclose their policy for the receipt, investment, and utilization of Islamic donations, along with the specific amounts and avenues of use, within their financial statements.
Government of Pakistan Securities and Exchange Commission of Pakistan -.-.-.- Islamabad, the 26th October, 2023 NOTIFICATION S.R.O. 1513(I)/2023.- In exercise of powers conferred by section 512 of the Companies Act, 2017 (XIX of 2017), the Securities and Exchange Commission of Pakistan is pleased to make the following amendments to the Associations with Charitable and Not for Profit Objects Regulations, 2018, the same having been previously published for comments vide S.R.O. 1355(I)/2023 dated September 20, 2023. AMENDMENTS In the aforesaid Regulations, - (1) in regulation 7, for clause (xii), the following shall be substituted, namely:
“(xii) the company shall: (a) not exploit or offend the religious susceptibilities of the people; and (b) ensure that Islamic donations, including but not limited to zakat, sadaqah or in any other form, shall not be received, invested, or utilized by it in any way that is contrary to the Shariah principles: Provided that it shall be the responsibility of the company to arrange a Shariah opinion in the form of a Fatwa from a Shariah Advisor registered with the Commission for collection and utilization of such Islamic donations, which shall be duly annexed with the audited financial statements of the company.” (2) in regulation 13, after sub-regulation (1), following new sub-regulation (1A) shall be added, namely: - “(1A) The company shall clearly disclose its policy for receipt, investment and utilization of Islamic donations, as mentioned in clause (xii) of regulation 7, in the financial statements and shall also disclose amount of such donations and avenues where utilized.” [File No. CLD/CCD/CO.42/17/2005]