Regulatory Alerts2024-02-16
Added · Updated
Modaraba Regulations, 2021 amended updated till January 24, 2024
The Securities and Exchange Commission of Pakistan amends the Modaraba Regulations, 2021 to define key terms including financial services modarabas, contingent liabilities, and subordinated funds. The regulations impose prudential limits on modaraba exposures, capping total exposure to a single person at 20% of equity and to a group at 25%, while restricting aggregate exposure in listed equity securities to 25% of equity. Minimum margin requirements are established for various securities, such as 30% for listed company shares and 10% for rated TFCs and Sukuk. Additionally, the rules mandate credit bureau checks for finances exceeding five hundred thousand rupees and prohibit financing for customers with defaults exceeding six months or recent write-offs.