CIRCULAR NO. 10 OF 2008
Subject: Amendments
in the Prudential Regulations for Modarabas
The Securities and Exchange Commission of
Pakistan has amended the existing Prudential Regulations for Modarabas issued
vide Circular No. 4 of 2004 dated January 28, 2004 as under:
1.
Regulation 2 of Part-I
In sub-regulation (1) of
Regulation 2, after clause (h), the following new clauses (hh) and (hhh) are
inserted:
(hh) Fit and Proper Criteria means the
criteria specified in Part IV of these Regulations;
(hhh) Key
Executives includes the chief executive officer, chief financial officer, chief
accounting officer, chief operating officer, company secretary, internal
auditor or the compliance officer irrespective of their designation;
2.
Regulation 5 of Part-IV
The existing Regulation 5 of
Part-IV is substituted as under:
5. Fit
and Proper Criteria.
Application and scope:
(1)
The Fit and Proper
Criteria in
relation to a Modaraba
Company/Modaraba is applicable to the following
persons:
(i) Promoters
of the Modaraba Company/Modaraba;
(ii) Director
of the Modaraba Company; (iii) Chief Executive of the Modaraba Company;
(iv) Key
Executives of the Modaraba Company.
(2)
A proposed director or chief executive of the Modaraba
Company shall not assume the charge of their respective office until their
appointments have been approved by the Registrar (Modarabas).
(3)
The application for seeking approval of the Registrar
(Modarabas) under clause (2) shall be submitted by the Modaraba Company along
with the requisite information required under Annexure-A and the Affidavit as
specified in Annexure-B.
(4)
The appointment of Key Executives of the Modaraba
Company does not require the approval of the Registrar (Modarabas), however the
Modaraba Company shall ensure at the
time of appointing a Key Executive that such person qualifies the Fit and
Proper Criteria.
(5)
The fitness and propriety of any person shall be
assessed by taking into account all the relevant factors including but not
limited to the following:
(a) Integrity
and track record of such person. (b) Financial soundness of such a person.
(c)
Competence and capability of the person.
(d)
Conflict of interest of such person with the business
of the Modaraba Company.
ASSESSMENT OF FITNESS AND PROPRIETY
(1)
Integrity and
Track Record
A person shall not be considered Fit and Proper if he:
(i)
has been convicted of an offence involving moral
turpitude;
(ii)
has been involved in the mismanagement of investments,
financial/business;
misconduct, fraud, etc;
(iii)
has been the subject to adverse findings, after
conducting an inquiry, by the Commission/Registrar (Modarabas) or any other
regulatory or professional body or government agency;
(iv)
has been actively involved in the management of a
company/firm whose registration/ license has been revoked or cancelled or which
has gone into liquidation or other similar proceedings due to mismanagement of
affairs, financial
misconduct or malpractices;
(v)
is ineligible, under the Companies Ordinance, 1984 the
Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 or any
other legislation or regulation, from acting as a director or serving in a
managerial capacity of a
Modaraba Company, NBFC or a
company;
(vi)
has entered into a plea bargain arrangement with the
National Accountability Bureau;
(vii)
does not have the requisite disclosed and verifiable
financial resources in case of a promoter of the Modaraba
Company/Modaraba; or
(viii) does
not have an established and proven track record of successfully running a business
enterprise for 3 to 5 years, preferably a public listed company.
(2)
Financial
soundness
In determining
a person’s financial soundness, the following shall be considered:
(i)
whether such person’s financial statements/record
including wealth statements/income tax returns/ assessment orders are
available;
(ii)
whether the person has been declared by a court of
competent jurisdiction as defaulter in repayment of loan to a financial
institution exceeding Rupees one million;
(ii) whether
the person has applied to be adjudicated as an
insolvent and his application
is pending;
(iv)
whether the person is an un-discharged insolvent; and
(v)
whether the person has been declared a defaulter by a
stock exchange.
(3)
Competence and
Capability
In determining
a person’s competence and capability the following shall be considered:
(i)
the directors should be individuals having
management/business experience of at least five years at a senior level;
(ii)
the directors shall have experience and knowledge in
any profession such as financial services, accounting, law etc;
(iii)
the chief executive should have a minimum experience of
seven to ten years in a senior management position, preferably in the regulated
financial services sector;
(iv)
the chief executive should have the capacity to
successfully undertake the responsibilities of the position; and
(v)
the Key Executives must be qualified professionals
possessing relevant experience and certification relating to the job/
assignment.
(4)
Conflict of
interest
The proposed
directors or chief executive of Modaraba Company shall not:
(i)
be a director in any other Modaraba Company engaged in a similar business in
Pakistan.
Provided that this condition
shall not apply to nominees of the Commission, Federal or Provincial
Governments on the board
of any Modaraba Company;
(ii)
be a director, chief executive, chief financial
officer, chief internal auditor, research analyst or a trader (by whatever
name/designation called) in a stock brokerage house or in any company/entity
owned and controlled by a member of a stock exchange; and
(iii)
be a member of a stock exchange engaged in the business
of brokerage or is a spouse of such member.
(5)
The Fit and Proper Criteria is perpetual in nature and
a Modaraba Company shall ensure compliance with the provisions of Fit and
Proper
Criteria.
(6)
All persons subject to Fit and Proper Criteria must
submit any change in the submitted information through the Chief
Executive/Company Secretary of the Modaraba Company to the Registrar
(Modarabas).
(7)
Any violations or circumvention of the Fit and Proper
Criteria shall be dealt with under Section 32 of the provisions of
the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980.
Annexure A
Information to be provided by Promoters,
proposed director and proposed chief executive of the Modaraba Company
–
|
1.
|
Curriculum Vitae/Resume containing:
|
|
a
|
Name: (former name if any):
|
|
b
|
Father’s/Husband Name:
|
|
c
|
C.N.I.C # (attach copy)
|
|
d
|
Latest photograph
|
|
e
|
Nationality:
|
|
f
|
Age:
|
|
g
|
Contact details:
|
|
|
i) Residential address:
|
|
|
ii) Business address:
|
|
|
iii) Tel:
|
|
|
iv) Mobile:
|
|
|
v) Fax:
|
|
|
vi)
E-mail:
|
|
h
|
National Tax Number:
|
|
i
|
Present occupation:
|
|
j
|
Qualification(s):
|
|
|
i) Academic:
|
|
|
ii) Professional:
|
|
k
|
Experience:
(Positions held during the
last 10 years along with name and address of company/institution)
|
|
2.
|
Nature of directorship:
Executive
Non-executive
Status
of directorship Nominee
director
Nominated by
___________(name of shareholder along with nomination letter)
Number of shares
subscribed/held__________________________
Personal net worth (copy
of wealth statement) ______________
|
|
3.
|
Names of companies, firms and other
organizations of which the proposed person is a director, partner, office
holder or major shareholder.
|
|
4.
|
CIB report issued by SBP for each company of
which he has been a director (attach original CIB report for the last 10
years)
|
|
5.
|
In the case of appointment of directors the
date of board of directors’ meeting in which the appointment of proposed
director was approved. (Attach copy of the minutes of the meeting of the
board of directors. If the director is elected,
|
|
|
then attach a copy of the
minutes of the general meeting of the company.)
|
|
6.
|
Names of persons on the
Board of the Modaraba Company who
are related to the applicant.
|
NE
SS &
PROPRIETARY OF
KEY EXECUTIVES
Signature_________________________________________________________
*use additional sheets if
required
Annexure B
(On Stamp Paper of appropriate value)
AFFIDAVIT
Before the
Registrar (Modarabas), Securities and Exchange Commission of Pakistan:
I,
________________ son/daughter/wife of _______________________ adult, resident
of ___________________________________________________________ and holding
CNIC/Passport
No.
______________________________ do hereby state on solemn affirmation as under:-
1.
That I am eligible for the position of
___________according to the Fit and Proper Criteria for the position of
_________, as prescribed under the Prudential Regulations for Modarabas.
2.
That I hereby confirm that the statements
made and the information given by me is correct and that there are no facts
which have been concealed.
3.
That I have no objection if the Registrar
(Modarabas) or Securities and
Exchange Commission of Pakistan requests or obtains information about me from
any third party.
4.
That I undertake to bring to the
attention of the Registrar (Modarabas)/Securities Exchange Commission of
Pakistan any matter which may potentially affect my status for the position of
____________ as per the Fit and Proper Criteria as prescribed under the
Prudential Regulations for Modarabas.
5.
That all the documents provided to the
Registrar (Modarabas)/ Securities
Exchange Commission of Pakistan are true copies of the originals and I have compared
the copies with their respective originals and certify them to be true copies
thereof.
2.
That I do hereby verify that the statements made above are correct to the best
of my knowledge and belief and nothing has been concealed therein.
DEPONENT
The Deponent is identified by me
Signature ____________
_____________________
ADVOCATE
(Name and Seal)
Solemnly affirmed before me on this ______ day of
_____________ at ______________ by the Deponent above named who is identified
to me by ________________, Advocate.
Signature________________________
OATH COMMISSIONER FOR TAKING
AFFIDAVIT
(Name and Seal)
3.
Part-IV
In Part-IV, Annexure-II (Form-I
& II), Annexure-III (Affidavits from Sponsoring Director/Sponsoring
Institution/Nominee Director) are deleted/removed.
The aforesaid amendments in the Prudential
Regulations for Modarabas are applicable with immediate effect.
(Bilal
Rasul)
Registrar (Modarabas)
Distribution:
1.
The Chief Executives of all Modaraba Companies.
2.
The Chairman, Modaraba Association of Pakistan.
3.
The Institute of Chartered Accountants of Pakistan,
Karachi.
4.
The Institute of Cost and Management Accountants of Pakistan,
Karachi.
5.
Media Consultant, SEC 6. Executive
Director IS & T.
7. Office
copy.
No comments:
Post a Comment