ISLAMABAD, Sept 12: The Securities and Exchange Commission of Pakistan (SECP) has notified draft amendments to the Non-Banking Finance Companies (establishment and regulation) rules 2003 (NBFC Rules).

The rules have been placed on the SECP website to solicit comments and feedback from the public.

The NBFC rules, first notified in April 2003 under section 282-B of the Companies Ordinance, 1984, are the governing legal framework for companies involved in the business of investment finance, leasing, housing finance, venture capital investment, discounting services, investment advisory services and asset management.

The revision to the NBFC rules has been made at SECP in line with the best international practices and feedback from the market participants at various stages, the commission said in a statement issued here on Tuesday.

The amendments have been drafted keeping in view the recent developments taking place in the financial sector. Accordingly, a single licensing regime is proposed to be introduced for activities in leasing, investment finance and housing finance under the revised rules. Similarly, the NBFCs seeking to undertake investment advisory and asset management services will also be able to obtain a single license for both the activities.

Moreover, the draft amendments will augment the legal provisions governing the investment advisory and asset management services.

The amendments will further address practical difficulties being faced by the NBFCs to ensure compliance with the rules.

To strengthen risk management and investors’ confidence, the disclosure requirements for companies seeking to raise public deposits by way of certificates of deposit (COD) are also being enhanced.

Additionally, in order to ensure strong corporate governance in the NBFC sector, the concept of "fit and proper criteria" has been introduced for directors and key executives.

The SECP expects that the draft amendments will provide the regulatory flexibility and structure for continued healthy growth of the sector. Comments and feedback on these amendments may be forwarded to the SECP in this regard.