Regulatory Alerts2023-09-01
Added · Updated
Circular 12 of 2023: Licensing and Allied Applications with Sponsors/Directors as Foreign Individuals/Entities
Applications for Non-Banking Finance Company licenses must specify the exact category of investment finance service, including detailed sub-categories for microfinance. Licenses or board/shareholder changes for companies with foreign sponsors, directors, or shareholders require prior security clearance from the Ministry of Interior. These requirements apply to all pending and future applications under the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003, effective immediately.
SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN LICENSING & REGISTRATION DIVISION (L&RD) LICENSING DEPARTMENT
No. LRD/LD/Circular / 34 /2003 CIRCULAR NO 12 OF 2023 Islamabad, August 31, 2023
SUBJECT: LICENSING AND ALLIED APPLICATIONS WITH SPONSORS/DIRECTORS AS FOREIGN INDIVIDUALS/ENTITIES
In exercise of powers conferred by Section 282B (3) of Part VIIIA of the Companies Ordinance, 1984 (XLVII of 1984), (the Ordinance), the Securities and Exchange Commission of Pakistan (“the Commission”) in order to effectively discharge the licensing of Non-Banking Finance Companies (NBFCs), is hereby pleased to direct that;
(a) an application made under Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 (“the Rules”), shall clearly specify the particular category of licensing activity of Investment Finance Service, which the applicant intends to perform, amongst the following:
(i) Investment Finance Company; (ii) Discounting Services; (iii) Housing Finance Services; (iv) Leasing Services; (v) Microfinance services; 1. Conventional Nano Lending 2. Digital Nano Lending 3. Buy Now Pay Later - BNPL 4. Advance against salary, B2C 5. Advance to SME/MSME 6. Other ______ please specify
The NBFC shall obtain prior permission in case of any change subsequent to grant of license in the type of business activity stated in the application.
(b) As of the date of this Circular, all applications for license or any subsequent changes in the composition of the board/shareholders of the companies with above stated activities, wherein sponsors/directors/shareholders are foreign nationals/foreign entities, shall only be granted/allowed upon receipt of requisite prior security clearance from Ministry of Interior, Government of Pakistan.
- This Circular shall come into force with immediate effect.
Akif Saeed Commissioner (L&RAD)
Distribution:
- CEO, MUFAF, Karachi.
- CEOs of all existing NBFCs.
- Chairman, NBFI & Modarabas Association of Pakistan
NIC Building, 63 Jinnah Avenue, Blue Area, Islamabad.