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Exemption Related Notification

The Securities and Exchange Commission of Pakistan issued a notification specifying classes of companies that are exempt from restrictions on investing in other companies' securities under Section 199 of the Companies Act 2017. The exempt classes include banking companies, development finance institutions, non-banking finance companies, asset management companies, modaraba management companies, holding companies, investment advisory companies, private companies, and investment companies, provided the investments are made in accordance with relevant regulations. The notification supersedes an earlier notification from 2011.

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24 views

Exemption Related Notification

The Securities and Exchange Commission of Pakistan issued a notification specifying classes of companies that are exempt from restrictions on investing in other companies' securities under Section 199 of the Companies Act 2017. The exempt classes include banking companies, development finance institutions, non-banking finance companies, asset management companies, modaraba management companies, holding companies, investment advisory companies, private companies, and investment companies, provided the investments are made in accordance with relevant regulations. The notification supersedes an earlier notification from 2011.

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mt.learningmaterial
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN

Islamabad, 6th December, 2017

NOTIFICATION

S. R. O. 1239 (I)/2017. - In exercise of powers conferred by section 510 read with


clause (a) of sub-section (3) of section 199 of the Companies Act, 2017 (XIX of 2017) and
in supersession of its earlier notification S.R.O. 704(I)/2011 dated July 13, 2011, the
Securities and Exchange Commission of Pakistan is pleased to specify the following classes
of companies to which the restriction provided in sub-section (1) of section 199 of the Act
shall not apply to the extent provided hereunder:

(a) A banking company duly licensed by the State Bank of Pakistan, to the
extent of investments made in the ordinary course of its business,
excluding equity investments;

(b) A Development Finance Institution duly licensed by the State Bank of


Pakistan, to the extent of investments made in the ordinary course of its
business, excluding equity investments;

(c) A Non-Banking Finance Company (“NBFC”) duly licensed by the


Commission, to the extent of investments made in the ordinary course
of its business, excluding equity investments;

(d) An NBFC duly licensed by the Commission to carry out Investment


Advisory Services or Asset Management Services, to the extent of
investments made in a Collective Investment Scheme being managed by
such NBFC;

(e) A Modaraba Management Company, to the extent of investments made


in a Modaraba being managed by such company;

(f) A holding company, to the extent of investments made in its wholly


owned subsidiary:

Provided that any disinvestment by a holding company which


would reduce its holding in the subsidiary, in which an investment was
made pursuant to this exemption, to less than seventy percent shall be
made under the authority of a special resolution;

(g) A company whose principal business is the acquisition of shares, stock,


debentures or other securities, to the extent of acquisition of such
securities on behalf of its clients in the ordinary course of its business;

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(h) Associated companies of NBFCs licensed to undertake asset
management services for making investment (other than seed capital) in
the open end schemes managed by such NBFCs;

(i) A private company which is not a subsidiary of a public company;

(j) Companies making investment in the form of deposits with associated


banking company duly licensed by the State Bank of Pakistan or NBFC
duly licensed by the Commission provided that the rate of return should
not be less than prevailing market rate of return on similar deposits;

(k) Any investment made by an investment Company, as defined in Non-


Banking Finance Companies and Notified Entities Regulations, 2008, in
accordance with its investment policy given in the prospectus.

[CSD/W-II/RegulationsSec199/112/2017]

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