ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has relaxed the condition of issuing licences to nonprofit associations under section 42 of the Companies Ordinance, 1984.

A press release issued by the SECP stated that as per the amendment, now investment in associated companies can be made after prior approval of the SECP.

The amendment reads as follows: 'The Association shall make no investment, whatsoever, in its associated companies except with the prior approval of the Commission and subject to such conditions as it may deem fit to impose.

Previously, the condition required that the 'not-for-profit' association will make no investment, whatsoever, in its associated companies. The condition was originally imposed to restrict improper use of funds by the associations.

'However, it has been observed that the condition was causing problems for transactions backed by genuine reasons. SECP hopes that the amendment would facilitate genuine transactions by the not-for-profit associations, which was earlier not possible,' the statement added.