GOVERNMENT OF PAKISTAN
SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN

Islamabad, the 27th October, 2021

NOTIFICATION

S.R.O.1395(I)/2021.- In exercise of the powers conferred under section 169 of the Securities Act, 2015 (III of 2015), the Securities and Exchange Commission of Pakistan is pleased to make the following amendments in the Public Offering (Regulated Securities Activities Licensing) Regulations, 2017, the same having been previously published in the official Gazette vide S. R. O. Notification, 855(I)/2021 dated July 01, 2021, as required under sub-section (4) of section 169 of the Securities Act, 2015 for eliciting public opinion, namely:-

AMENDMENTS

In the aforesaid Regulations,-

(1) in regulation 2, in sub-regulation (1), in clause (iv), after the words “licensed” the words “or permitted” shall be inserted;

(2) in regulation 3, after the words “licensed” appearing for first time, the words “or has permission” shall be inserted and thereafter the provisos shall be omitted;

(3) in regulation 6, in sub-regulation (1), -

(a) for clause (e), following shall be substituted, namely:-

“(e) the applicant and its sponsors/directors or CEO are fit and proper as per section 151 of the Act’; and

(b) clauses (g) and (h) shall be omitted;

(4) in regulation 7, in sub-regulation (1), for the full stop at the end a colon shall be substituted and thereafter the following proviso shall be inserted, namely:-

“Provided that a securities broker having valid license to act as consultant to the issue or underwriter shall apply, to the Commission in Form C of these Regulations or Form C of Securities Brokers (Licensing & Operations) Regulations, 2016 along with an undertaking stating that it is in compliance with all regulatory requirements”;

(5) in regulation 9, after the words “their obligations” the words “and responsibilities” shall be inserted and thereafter for the full stop at the end a colon shall be substituted and thereafter the following proviso shall be inserted, namely:-

“Provided that in case of scheduled bank, investment finance service license holder and development financial institution registered with the securities exchange as market maker for debt securities, it shall be compliant with all the requirements laid down by the securities exchange relating to market making.”

(6) in regulation 10,-

(a) in sub-regulation (1), after the word “license” the words “or permission” shall be inserted;

(b) in sub-regulation (2),-

(i) after the words “or underwriter”, appearing for the first time, the words “or debt securities trustee” shall be inserted;

(ii) after the words “or underwriter” at the end, the words “or debt securities trustee or revoke permission granted to them” shall be inserted;

(c) in sub-regulation (3), after the words “license” the words “or revocation of permission” shall be inserted. After the words “consultant to the issue or underwriter” the words “or debt securities trustee” shall be inserted;

(7) in regulation 12,-

(a) in the heading, after the words “banker to an issue” the expression “, consultant to the issue” shall be inserted;

(b) in sub-regulation (1), after the words “a banker to an issue” the expression “, consultant to the issue” shall be inserted;

(c) for sub-regulation (2), following shall be substituted, namely:-

“(2) Any development financial institution and scheduled bank shall obtain permission of the Commission prior to commencing the business as underwriter, a banker to an issue, consultant to the issue and debt securities trustee and the said development financial institution and scheduled bank shall submit a board resolution authorizing it to undertake the business as an underwriter, a banker to an issue, consultant to the issue and debt securities trustee along with documents specified in Annexure I of these Regulations. The development financial institution to act as an underwriter and scheduled bank to act as a banker to an issue shall pay a non-refundable fee of Rs. 500,000 and to act as Consultant to an issue, a scheduled bank and Development Financial Institution shall pay a non-refundable fee of Rs. 200,000/-. The scheduled bank to act as underwriter shall pay a non-refundable fee of Rs. 250,000/-.”;

(c) in sub-regulation (4), after the words “a banker to an issue” the expression “, consultant to the issue” shall be inserted;

(d) in sub-regulation (5a), -

    (i) after the words “business of underwriting” the words “and consultant to the issue” shall be inserted.

    (ii) in the first proviso, after the words “a banker to an issue,” the words “or consultant to an issue, shall be inserted;

(iii) in the second proviso, after the words “business of underwriter” the expression “, consultant to the issue” shall be inserted;

(iv) in the second proviso, for the full stop at the end a colon shall be substituted and thereafter the following new provision shall be inserted, namely:- “Provided also that a scheduled bank which has permission or license to act as banker to an issue under Regulation (5) or Regulation 12(2) respectively of these Regulations, within one month of the end of each calendar year or one month prior to expiry of its existing license as the case may be, shall pay fee of Rs. 250,000/ to the Commission.”; and

(e) in sub-regulation (6), after the words “a banker to an issue” the expression “, consultant to the issue” shall be inserted and after the words “non-submission of affidavit” the words “or applicable fee” shall be inserted;

(8) in SCHEDULE I,-

(a) in clause (2) “Specific Conditions:”,-

    (i) in paragraph (1), in sub-paragraph (iii), the word “and” at the end, shall be omitted;

    (ii) in paragraph (2),-

      (a) in sub-paragraph (ii), after the words “it has obtained management rating” the words “or a broker fiduciary rating” shall be inserted;

      (b) sub-paragraph (iv) shall be omitted;

(9) in FROM A, in the heading, for the word “REGISTRATION” the word “LICENSE” shall be substituted;

(10) in Annexure-I, -

(a) in the reference, after the expression “See regulation 5(1)” the expression “& Regulation 12 and Form A” shall be inserted;

(b) after the heading, for the paragraph, following shall be substituted, namely:- “The following documents and information shall be provided by the Applicant which is a licensed securities broker, a scheduled bank, a development financial institution, an investment finance service license holder, and who meets eligibility criteria as prescribed in Schedule I of these Regulations, to the Commission along with application under regulation 5(1) for license or under Regulation 12 for obtaining permission, where applicable:-”

(c) for the Heading 1, 2, and 3, the following shall be substituted, namely:- “1. copy of Memorandum of Association of Applicant with enabling clause to act as Underwriter or Consultant to an issue or debt securities trustee;

2. undertaking from the Applicant that it is compliant with all the regulatory requirements of these regulations

3. latest Credit Rating/Broker Management rating/Broker fiduciary rating (where applicable) from a credit rating company duly licensed by the Commission.

4. in case of Banks DFIs or Investment Finance Services, to act as consultant to an issue, confirmation from securities exchange that the Applicant is registered/appointed with it as market maker and compliant with all relevant requirements;

DOCUMENTS REQUIRED IN CASE OF WHOLLY OWNED SUBSIDIARY OF A SECURITIES BROKER, A WHOLLY OWNED SUBSIDIARY OF A SCHEDULED BANK OR A WHOLLY OWNED SUBSIDIARY OF A DEVELOPMENT FINANCIAL INSTITUTION, AND A COMPANY UNDER CLAUSE 2(i)(C) OF SUB-PARAGRAPH (2) OF THE SCHEDULE I OF THE REGUALTIONS TO ACT AS CONSULTANT TO THE ISSUE & CLAUSE 4(i) &(ii) OF THE SCHEDULE I OF THE REGUALTIONS TO ACT AS DEBT SECURITIES TRUSTEE

(i) Brief history of the applicant containing name of the applicant; date and place of its incorporation; date of commencement of business; length of experience, if any; names of its sponsors and promoters; group structure, if any, its associated companies

(ii) Last annual audited account accounts.

(iii) Address of the registered office of the applicant (postal address, postal code and telephone and fax numbers).

(iv) Profile of chief executive officer, chief financial officer, company secretary, compliance officer, directors and sponsors of the applicant Name, qualification, experience and date of appointment. Directorship in other companies, if any, names of such other companies and date of appointment as director in such other companies.

(v) Copy of memorandum and articles of association

(vi) Detail of ongoing legal proceedings, if any, initiated against the applicant by the Commission or any other regulatory authority.

(vii) An affidavit on the pattern as specified in Annexure-II signed by the chief executive or director or any other officer of the applicant authorized to do so.

(viii) Latest Credit Rating/management rating (where applicable) from credit rating company duly licensed by the Commission

(ix) Detail of penal action taken against company or its director, CEO or sponsors

(x) In case any group or company of the applicant is already licensed under these Regulations, the following details shall be provided:

(a) Name of such group or company;

(b) Detail of warning notices, if any, issued to such group or company by the Commission during the last three years;

(c) Detail of ongoing legal proceedings, if any, initiated against such group or company by the Commission; and

(d) Penal action, if any, taken against such group or company by the Commission during the last three years.

(xi) List of financial or criminal offenses in which the applicant or any of its sponsors or directors has remained involved during the last three years.

(xii) Procedure for redressal of complaints lodged by the investors.

(xiii) Date-wise breakup of the Issues in which the applicant acted as consultant to the issue or underwriter or debt securities trustee during the last three years, if any

(xiv) Any other information required by Commission.”; and

(11) in Annexure-II, -

(a) in the reference, for the expression “Para 3.4” the expression “clause vii” shall be substituted; and

(b) after paragraph 4, following new paragraph shall be inserted: -

“5. That the …..(name of applicant)……is compliant with all the regulatory requirements of these regulations.”.

[No. 2(33)/SMD/2021]