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THE GAZETTE OF PAKISTAN
PART II
Statutory Notification (S. R. O.)
Government of Pakistan
Securities and Exchange Commission of Pakistan
Islamabad the, 16 Jan, 2002
NOTIFICATION
S.R.O.29(I)/2002. _The following draft of the amendments in the Asset Management Companies Rules, 1995, which are proposed to be made in exercise of the powers conferred by section 32 and 33 of the Securities and Exchange Ordinance, 1969 (XVII of 1969) read with section 43 (b) of the Securities and Exchange Commission of Pakistan Act, 1997 (XLII of 1997), is hereby published for the information of all persons likely to be affected thereby and notice is hereby given that the draft will be taken into consideration after thirty days of its publication in the Official Gazette.
Any objection or suggestion, which may be received from any person in respect of the said draft before the expiry of the said date will be considered by the Securities and Exchange Commission of Pakistan
DRAFT AMENDMENTS
In the aforesaid Rules, -
1) in rule 2, -
i) in sub-rule (1), after clause (a), following new clauses shall be inserted, namely:-
“(aa) “Commission” means the Securities and Exchange Commission of Pakistan”.
ii) in clause (l), the word “and” appearing before the words “a banking institution” shall be replaced by a “coma(,)” and after the word “Authority” and before the “semi colon(;)” the words “and a central depository company approved by the Commission” shall be added.
iii) iii) in sub-rule (1), after clause (a), following new clauses shall be inserted, namely:-
“(aa) “Commission” means the Securities and Exchange Commission of Pakistan”.
vi) in clause (l), the word “and” appearing before the words “a banking institution” shall be replaced by a “coma(,)” and after the word “Authority” and before the “semi colon(;)” the words “and a central depository company approved by the Commission” shall be added.
2) in rule 4, the word “and” at the end of clause (d) shall be deleted and in clause (e) the “full stop (.)” shall be substituted with “semi-colon(;) and”, and the following new clause shall be inserted, namely. -
“(f) such a person is not registered as a broker or agent with the Commission or any stock exchange.”
3) in rule 5, -
i) in sub-rule (1), after clause (a), following new clauses shall be inserted, namely:-
“(1) A company eligible for registration shall make an application in Form I to the Commission providing information as given in Annex thereto accompanied by bank draft of fifty thousand rupees as application processing fee, along with a undertaking that no change in the directors shall be made without prior authorization by the Commission.”
4) after rule 5, the following new rule shall be added, namely:-
5-A. Renewal of registration
(1) Certificate of registration of an asset management company shall be valid for one year and shall be renewable on receipt of an application on Form-III-A, to be filed within validity period of registration and payment of ten thousand rupees as renewal fee.
(2) The asset management company can file application for renewal of registration alongwith late filing fee of one thousand rupees within three months of expiry of the registration
Provided that the asset management companies already registered with the
Commission shall submit application for renewal of registration with effect from
the due date falling after 30 June 2002
(3) The Commission may, after making such enquiry and after obtaining such further information as it may consider necessary, renew the registration of asset management company for another term on such terms and conditions as it may deem necessary in Form-III-B.
(4) In case a company fails to submit application for renewal as provided in sub rule (1) and (2), the Commission may proceed in terms of rule 6, against the asset management company.”
5) in rule 6, in sub rule (1) the “coma(,)” after the word “writing” shall be substituted by a “colon (:)” and for the words “ cancel the registration of the asset management company” shall be substituted with following clauses:-
(a) suspend the registration; or
(b) issue cease and desist orders; or
(c) order compensation to be paid to the investors; or
(d) ban defaulters to be employed within securities market temporarily or permanently; or
(e) cancel registration of the asset management company; or
(f) impose fine in terms of section 22 of the Ordinance; or
(g) take any combination of the above actions against the asset management company and its directors and officers who are found willfully and intentionally in default.”
6) in rule 8, in clause (h), after the words “trustees” and before the full stop (.) the words “and such auditor shall not be appointed for more than three consecutive years” shall be added.
7) for rule 9, the following shall be substituted:-
(i) “An asset management company shall be entitled to a remuneration during the first five years of scheme, of an amount not exceeding three per cent of the average annual net assets of the company and thereafter of an amount equal to two per cent of such assets.”
(ii) Clause (a) and (b) shall be deleted.
8) after rule 10, a new rule shall added namely: -
10(A). “ Special audit of a scheme.
(1) The Commission shall monitor general financial condition of the scheme, and, at its discretion, may order special audit and appoint an auditor to carry out detailed scrutiny of the affairs of the scheme, provided that the Commission may, during the course of the scrutiny, pass such interim orders and directions as it may deem appropriate.
(2) On receipt of the special audit report, the Commission may direct the asset management company to do or to abstain from doing certain acts and issue directives for immediate compliance which shall be complied forthwith.”
9) in rule 15, for sub rule (2), the following shall substituted:-
(2)Borrowing shall not be resorted to except for meeting redemption requests and such borrowing shall not exceed ten per cent of the total net asset value of a scheme at any time and shall be repayable within a period of ninety days.
10) after rule 18, the following new rules shall be inserted, namely:-
18(A).Reports to be submitted by trustee.- The trustee shall submit a report to the Commission within ten-days of the duration specified by the Commission, on affairs of the asset management company and management of the scheme and report position of compliance with regard to obligations and restrictions specified in rule 7, 8, 13, 14 and 15 and any other matter specified by the Commission.
18(B).Change of trustee.- In case, the trustee fails to submit the report as specified under rule 18(A) or submits wrong information, or fails to comply with directives of the Commission, the Commission may, under the provisions of the trust deed, require change of such trustee by asset management company after giving the trustee an opportunity of being heard and having satisfied that default on the part of the trustee was intentional and willful.”
11) in rule 22, in sub rule (2) after the word “calculated” and before the word “on ” the words “by adopting forward pricing policy and” shall be inserted.
12) after rule 24, the following new rule shall be inserted, namely:-
25.Powers to give directions. The Commission may, if it is satisfied that it is necessary and expedient so to do in the public interest or in the interest of capital market, by an order in writing give such directions to the asset management companies and the trustees which are essential to enforce the rules including but not limited to making arrangements for safe custody of assets of the scheme, submission of reports and disclosure of information.
[No. SC/MF-RS/AMC/2001] Mohammad Hayat Jasra
Executive Director (Law)