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031008
SECURITIES & EXCHANGE COMMISSION OF
PAKISTAN
Circular No. 24 - Reference No. SC/NBFC-ED/792/2003
October 08, 2003
Assets provided on Lease/loan basis to the Employees (Excluding CEO & Directors)
Attention is invited to Rule 7 (2) (b) of the
Non-Banking Finance Companies (Establishment & Regulation) Rules, 2003 which
stipulates:
“A NBFC shall not purchase anything from, or sell anything to any director,
officer, employee of NBFC or from or to a person who either individually or in
concert with close relatives beneficially owns ten percent or more either of the
equity or other securities with voting rights, if any, issued by such NBFC
without the prior approval in writing of the Commission.”
2. In view of the above-mentioned rule, it has been observed that despite having
well defined policies, companies face practical difficulties while providing
vehicles and consumer goods on lease/loan basis to their employees as prior
approval of the Securities & Exchange Commission of Pakistan in each such case
is required.
3. Therefore, it is hereby clarified that prior approval of the Commission in
respect of assets offered on lease/loan basis to employees (excluding Chief
Executive Officer and Directors) is not required by NBFCs provided the service
manuals of the concerned companies permit grant of such leases/loans. The
leases/loans to CEO and directors shall, however, require approval from the
Board of Directors and the Commission prior to the grant of such facilities
(Najam Ali)
Executive Director
Distribution
Copy to:
1. The Chief Executives of all NBFCs.
2. Leasing Association of Pakistan.
3. Investment Banks Association of Pakistan
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