ISLAMABAD, Sept 25: The Securities and Exchange Commission of Pakistan (SECP) has issued draft Group Companies Registration Regulations, 2008 to provide an enabling framework for companies intending to avail tax relief from the Federal Board of Revenue (FBR).

The draft regulations have been placed on SECP’s website for eliciting comments and suggestions of the stakeholders and the general public.

The companies intending to avail tax relief based on group income/losses from the FBR under sections 59AA and 59B of the Income Tax Ordinance, 2001 are required to obtain prior designation from the SECP, states an official announcement issued here on Thursday.

It says the draft regulations will provide an enabling framework and would also serve to promote the group concept, which is imperative because the consolidation of the corporate sector for the emergence of strong groups in a global marketplace is the needed to enable them perform effectively in the competitive environment of the international markets.

The draft regulations upon promulgation will enable a holding company to apply to SECP for registration along with its subsidiary companies as a group, which will be required to comply with the requirements of the Code of Corporate Governance, International Accounting Standards, International Financial Reporting Standards, related party transactions and such other requirements as specified by the commission.

Under the daft, a company incorporated in Pakistan which is desirous of forming a group with its subsidiary companies shall furnish an application for registration as a group to the commission along with documents namely:

Statement showing details of the holding company and its subsidiaries, their sponsors, directors and pattern of shareholding; affidavit by the directors of the holding company; resolution of the board of directors of the holding company and its subsidiaries for formation of a group; original bank receipt evidencing the payment of application fee of Rs200,000; and any other information required by the commission.

However, the registration granted by the SECP can be cancelled if any company within the group fails to comply with the requirements of the regulations or any direction given by the commission: Whoever contravenes or fails to comply with any provision of these regulations shall be fined up to Rs500,000.