ISLAMABAD, Nov 24: While market players have to wait for some more time to see ‘floor’ from the KSE 100-share index removed, the Securities and Exchange Commission of Pakistan (SECP) on Monday issued regulations to throw a life jacket to investors of Non-Bank Finance Companies (NBFCs) and mutual funds swimming in troubled waters.

The SECP has notified the NBFCs Regulations, 2008 in which time for compliance with various regulatory requirements has been extended. It is hoped that this would give the industry time to reposition itself adequately and stand the strong winds that are blowing across the Karachi Stock Exchange, which is in the lap of troubles since August this year.

In the new regulations, the shareholders of NBFCs and mutual funds have been empowered to effectively participate in the continuation and growth of respective industries.

The SECP officials say the new regulations are well thought-out document prepared in consultations with the industry participants and deep deliberations at the commission’s level. The document aims at facilitating NBFC operations and putting in place risk mitigation measures to address the challenges posed by market conditions, particularly since August this year.

Under the new regulations, the requirement for listing at stock exchange for entities engaged in deposit taking has been extended up to June 30, 2009.

The time schedule to comply with the minimum equity requirement has been extended by one year. The time period for aligning portfolios by asset management companies (AMCs) has also been extended until June 30, 2009.

Annual fees on mutual funds have been reduced depending on the category of a fund. Procedure for cancellation of registration and revocation of the open-end scheme or closed-end scheme by the AMCs has been improved.

Addressing the issue of deep discount on closed-end mutual funds, certificate holders have been empowered to decide conversion into open-end or revocation of the funds. The application of provisioning criteria on non-performing assets has been extended for a period of two years.

Per-party and per-sector exposure limits have been specified for different types of schemes and collective investment schemes have been barred from investing in securities of its asset management company.

The Board of Directors of NBFCs will be required to approve opening of account with banks and brokers.