PART-II
Statutory Notifications (S.R.O.)
Government of Pakistan
SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN
NOTIFICATIO
Islamabad, the 30th
March, 2012
S.R.O. 339(I)/2012.__ In
exercise of the powers conferred by Section 506A of the Companies Ordinance,
1984 (XLVII of 1984) and having being previously published in the official
Gazette vide Notification No. SRO 712(I)/2011 dated July 18, 2011 as required
by subsection (1) of section 506-A of the said Ordinance the Securities and
Exchange Commission of Pakistan hereby makes the following Regulations,
namely:-
CHAPTER I
PRELIMINARY
1.
Short title and commencement.__ (1) These Regulations
shall be called the “Debt Securities Trustee Regulations, 2012”.
(2) They shall come into force at once.
2. Definitions. __ (1)
In these Regulations, unless there is anything repugnant in the subject or
context, _
(a)
“Act” means the Securities and Exchange Commission of
Pakistan Act, 1997 (XLII of 1997);
(b)
“Constitutive Documents” includes the memorandum and
articles of association and any document governing the formation of a company
or a body corporate;
(c)
“Commission” means the Securities and Exchange
Commission of Pakistan
established under Section 3 of the Act;
(d) “Debt
Security” means any security which creates or acknowledges indebtedness and
includes;
(i)
Corporate debt securities such as Term Finance
Certificates (TFCs), Sukuk Certificates, Participation Term Certificates
(PTCs), Commercial Papers, and all kinds of debt instruments issued by any
Pakistani or foreign company or corporation registered in Pakistan; and
(ii)
Government debt securities such as Treasury Bills
(T-bills), Federal Investment Bonds (FIBs), Pakistan Investment Bonds (PIBs),
Foreign Currency Bonds, Government Papers, Municipal Bonds, Infrastructure
Bonds and all kind of debt instruments issued by Federal Government, Provincial
Governments, Local Authorities and other statutory bodies.
(e)
“Debt Securities Trustee” means a person appointed as a
Debt Securities Trustee by virtue of a
Trust Deed and registered under these Regulations;
(f)
“Form” means a form specified through these
Regulations; (g) “Issue” includes
issue of debt securities through,-
(i)
initial public offering by an issuer;
(ii)
secondary public offering by an issuer;
(iii)
an offer to the existing shareholders or debt
securities holders by an issuer;
(iv)
private placement to persons referred to and notified
under Section 120 of the Ordinance; or
(v)
offer for sale to the public by an offeror.
(h)
“Investment Finance Company” means a company as defined
in clause (xxiv) of subregulation (1) of regulation 2 of Non-Banking Finance
Companies and Notified Entities Regulations, 2008;
(i)
“Offeror” means any person who directly or indirectly
holds ten percent or more debt securities and offers for sale such debt
securities in full or in part to the general public;
(j)
“Ordinance” means the Companies Ordinance, 1984 (XLVII
of 1984);
(k)
“Regulations” means these regulations along with all
Schedules, Forms and Annexures attached to it;
(l)
“Schedule” means a schedule specified in these
Regulations;
(m)
“Scheduled Bank” has the same meaning as defined in
clause (m) of Section 2 of the State Bank of Pakistan Act, 1956 (XXXII of
1956); and
(n)
“Trust Deed” means a trust deed executed by an issuer or an Offerer, as the case may be,
in accordance with the provisions of the Trust Act, 1882 (II of 1882).
2)
Words and expressions used but not defined in these
Regulations shall, unless there is anything repugnant in the subject or
context, have the same meaning as are assigned to them in the Act, the
Ordinance or the Securities and Exchange Ordinance, 1969 (XVII of 1969).
3)
Headings and sub-headings given in these Regulations
are given for ease of reference and shall not change meaning of the terms
expressed in these Regulations.
CHAPTER II
REGISTRATION OF DEBT SECURITIES TRUSTEE
3. Prohibitions.__ (1) No
person shall act as or perform the functions of a Debt Securities Trustee
unless such person is registered with the Commission under these Regulations.
(2)
Any person providing services as Debt Securities
Trustee at the time of coming into force of these Regulations shall get itself
registered under these Regulations within a period of three months from the
date of notification of these Regulations in the official Gazette.
(3)
A Debt Securities Trustee shall not be eligible to act
as a Debt Securities Trustee to any Issue,-
(a)
of its associated company or associated undertaking;
(b)
where the Debt Securities Trustee or any of its
associated company or associated undertaking holds or has taken steps to
acquire any shares or debt securities of
the issuer;
(c)
where the Debt Securities Trustee has underwritten or
intends to underwrite the Issue;
(d)
where the Debt Securities Trustee or any of its
associated company or associated undertaking has provided any guarantee with
respect to the amount payable under such Issue.
4.
Eligibility
requirements for registration.__ Any person may apply to the
Commission for registration as a Debt Securities Trustee under these
Regulations if such person is authorized by its Constitutive Document to act as
a Debt Securities Trustee and is,-
(a)
a Scheduled Bank;
(b)
a Development Finance Institution as notified by the
State Bank of Pakistan;
(c)
an Investment Finance Company;
(d)
a wholly owned subsidiary set up by a Scheduled Bank,
Development Finance Institution or a depository company for carrying out the
activities of Debt Securities Trustee; or
(e)
any other company or entity or class of
companies/entities allowed by the Commission.
5.
Application
procedure for registration.__ (1) An application for
registration as a Debt Securities Trustee
shall be made to the Commission in Form
A along with all the documents specified in Annexure-I and receipt evidencing payment of non-refundable fee of
rupees one hundred thousand.
(2)
The Commission, while considering the application for
grant of certificate of registration, may require the applicant to furnish such
further information or clarification regarding its activities and businesses as
it deems appropriate.
(3)
Any subsequent change in the information provided to
the Commission at the time of filing of application under sub-regulation (1)
shall be intimated to the Commission within a period of seven working days from
the date of such change.
6. Grant of registration.__
(1) The Commission while considering the application for grant of certificate of registration made under sub-regulation(1) of
Regulation 5 shall inter-alia take
into account the following matters, namely,-
(a)
the ability of the applicant to safeguard the interest
of debt securities holders;
(b)
the capability of the applicant to efficiently handle
its functions as Debt Securities Trustee
and its obligations under these regulations;
(c)
the availability of necessary infrastructure including
but not limited to adequate office space, equipment, experienced manpower and
financial and technical aspects to effectively discharge its activities as Debt
Securities Trustee;
(d)
earlier refusal, if any, by the Commission for
registration of the applicant as a Debt Securities Trustee;
(e)
conviction or adverse findings in investigation of
directors or employees in the senior management level of the applicant in an
offence involving, fraud or breach of trust;
(f)
penal action against the applicant or its director(s)
including initiation of any kind of prosecution for an offence under the
Ordinance, Act or the Securities and Exchange Ordinance 1969 (XVII of
1969);
(g)
track record as a
Debt Securities Trustee, if any; and
(h)
any other matter as deemed necessary by the Commission.
(2)
The Commission on being satisfied that the applicant is
eligible for registration may grant a certificate of registration to the applicant in Form B and impose such conditions as it
may deem necessary.
(3)
The certificate of registration shall remain valid for a period of three years from the date of
registration unless it is restricted, suspended or cancelled earlier by the
Commission.
7. Renewal of Registration.__ (1)
A Debt Securities Trustee shall, three
months prior to the date of expiry of its registration, apply to the
Commission in Form C for renewal of
its registration along with all the documents specified in Annexure III and receipt
evidencing payment of non-refundable renewal fee of rupees one hundred
thousand.
(2)
The Commission upon being satisfied that the applicant
continues to meet the minimum requirement for registration and is eligible for
renewal of registration shall renew the registration of Debt Securities Trustee and issue a certificate of renewal of registration
to the applicant in Form D. Where
the Debt Securities Trustee fails to meet the requirements as mentioned in
regulation 4 and 6 above, its application for renewal may be refused subject to
the provisions of regulation 8.
(3)
Where the application for renewal of registration is
made within such time as specified in sub-regulation (1) but has not been
decided by the Commission the registration shall continue to be valid until the
application for renewal is decided by the Commission.
8. Procedure where registration is not granted or renewed. __ (1) The Commission, after giving a
reasonable opportunity of hearing to the applicant, may refuse to grant or
renew a certificate of registration if in the opinion of the Commission such
applicant does not fulfill the
requirements prescribed in these Regulations or where the Commission after
taking in to account the facts, is of the view that it is not in the public
interest or in the interest of the securities market to grant or renew such
certificate of registration.
(2)
The decision of refusal to grant a certificate of
registration or refusal of renewal of registration shall be communicated to the
applicant stating therein the grounds on which the application has been
rejected.
(3)
The applicant, if aggrieved by the decision of the
Commission under sub-regulation (1) may, within a period of thirty days from
the date of receipt of such refusal, apply to the Commission for review of its
decision.
(4)
On receipt of the application made under sub-regulation
(3), the Commission may review its decision and communicate its findings, in
writing, to the applicant within sixty days and the decision of the Commission
in this regard shall be final.
(5)
An applicant whose application for renewal of
certificate of registration is refused by the Commission under sub-regulation
(1) shall, from the date of receipt of the final decision of the Commission,
not act as Debt Securities Trustee for any new Issue.
(6)
A Debt Securities Trustee whose application for renewal
is refused shall, on the day of the receipt of the final decision of the
Commission, intimate to all the concerned parties including the issuers, the
debt securities holders, the concerned credit rating company and the stock
exchange(s) in case of listed debt securities about its inability to act as a
Debt Securities Trustee.
(7)
Debt Securities Trustee whose application for renewal
of certificate of registration is refused by the Commission shall continue to
act as such in all previous Issues in which it is acting as Debt Securities
Trustee till the appointment of any other Debt Securities Trustee by the issuer
or complete redemption of such Issues, whichever is earlier. Provided that the
appointment of any other Debt Securities Trustee should be made within such time
period as mentioned in the refusal order but not exceeding 60 days from the
date of such refusal.
CHAPTER III
DUTIES AND RESPONSIBILITIES OF DEBT SECURITIES TRUSTEE
9.
Obligations
of Debt Securities Trustee.__ A Debt Securities Trustee shall,-
(i)
sign a Trust Deed with the issuer before commencement
of the subscription period which inter-
alia contain that the Debt Securities Trustee has agreed to act as a
trustee under the Trust Deed for
securing the interest of the Debt
securities holders;
(ii)
ensure that the Trust Deed contains all terms and
conditions specified in Schedule-I
and required under the Trust Act, 1882 (II of 1882);
(iii)
ensure compliance with the provisions of the Trust
Deed;
(iv)
put in place a mechanism to resolve any conflict of
interest situation that may arise in the
conduct of its business as Debt Securities Trustee and where any conflict of
interest arises it shall take reasonable steps to resolve the same in an
equitable manner;
(v)
ensure that in
case of secured debt securities, appropriate security has been arranged and
based on the information obtained from the issuer, the assets backing the debt security are
maintained throughout the tenure of the Issue;
(vi)
enforce security, where necessary, in the interest of
the debt securities holders according to the terms of the Trust Deed;
(vii)
efficiently do such acts as are necessary in the event
the security becomes enforceable;
(viii)
regularly monitor compliance of the issuer with all the
covenants of the Trust Deed and in case of listed debt securities, report the
same on semi-annual basis to the concerned stock exchange and non-compliance,
if any, of the covenants of the Trust Deed shall upon its occurrence and coming
into its notice or knowledge be immediately reported to the concerned stock exchange
and the Commission;
(ix)
monitor the status of the redemption reserve, if any,
established by the issuer for the redemption of debt securities and furnish, on
semi-annual basis an update on the same to the Commission and in case of listed
debt securities to the concerned stock exchange as well;
(x)
regularly monitor payment of profits to the debt
security holders and redemption of the debt security and inform the Commission and the concerned stock
exchange, in case of listed debt securities of any default in payment of profit
or redemption of debt securities;
(xi)
maintain proper record of the complaints received and a
report on the number and nature of the complaints received and the manner in
which such complaints have been redressed shall be provided to the Commission
and in case of listed debt securities to the concerned stock exchange also , on
annual basis;
(xii)
ascertain that the
debt securities have been converted, where required, in accordance with
the provisions and conditions under which they were issued;
(xiii)
inform the Commission immediately of any breach by the
issuer of the Trust Deed or provision of the Ordinance or any other law
applicable to the Issue which comes to its knowledge;
(xiv)
ensure that the Commission is promptly informed about
any action, legal proceeding etc, initiated against it in respect of any
material breach or noncompliance by it of any law, rules or regulations;
(xv)
file yearly report with the Commission within sixty
days of the end of its financial year containing clause-wise status of the
compliance with the provisions of this
regulation;
(xvi)
comply with the code of conduct prescribed in Schedule II;
(xvii)
call a meeting of all
debt securities holders, within such time period as provided in the
Trust Deed, on, -
(a)
a requisition in writing signed by at least one-tenth
of the debt securities holders in value
for the time being outstanding; and
(b) the
happening of any event, which pursuant to the Trust Deed constitutes a default
by the issuer or which in the opinion of the
Debt Securities Trustee adversely affects the interest of the debt securities holders.
(xviii)
not relinquish duties as Debt Securities Trustee to an Issue until
another Debt Securities Trustee is
appointed in its place;
(xix)
file its audited annual accounts with the Commission
within thirty days of its issuance;
(xx)
submit any document or information as and when required
by the Commission; and
(xxi)
provide, on request in writing, copy of certified Trust
Deed to the debt security holders as and when required by them.
10.
Maintenance
of books and records by Debt Securities Trustee.__ (1) A Debt
Securities Trustee shall properly maintain at least the following record in
respect of each Issue:
(a)
all contracts relating to the Issue to which it is
acting as a Debt Securities Trustee including but not limited to the
Trust Deed, letter of hypothecation, memorandum of deposit of title deed and
the charge registration certificate, where applicable etc;
(b)
statements relating to profit payment and principal
redemption;
(c)
all documents relating to compliance with the covenants
of the Trust Deed and enforcement of security, where applicable;
(d)
Debt Security holders complaints and subsequent
correspondence; and
(e)
such other records as may be specified by the
Commission from time to time.
(2)
The Debt Securities Trustee shall ensure that the
record referred to in sub-regulation (1) is maintained and preserved in good
order for a period of at least five years from the date of complete redemption
of the Issue.
(3)
The Debt Securities Trustee shall,-
(a)
ensure that the record is kept at such a place and
maintained in such a manner that the Commission or any person appointed by it
has easy access to it; and
(b)
establish and follow record retention policies which
shall ensure that all relevant legal and regulatory requirements are complied
with.
11. Appointment of Compliance Officer.__
Every Debt Securities Trustee shall designate any of its officers as a
compliance officer possessing relevant qualification and experience and
certification as may be specified by the Commission. The Compliance Officer
shall be responsible for, -
(a)
monitoring compliance with the terms of the Trust Deed;
(b) redressal
of investors’ grievances and complaints; and
(c)
reporting to the Commission immediately if the Debt
Securities Trustee ceases to maintain
any of the requirements referred to in
regulation 4 of these Regulations.
CHAPTER IV
DISCIPLINARY PROCEEDINGS
12. Restrictions, Suspension of Registration.__ (1)
Where a Debt Securities Trustee contravenes or fails to comply with any provision
of these Regulations or fails to fulfill its obligations under the Trust Deed
or is not in compliance with conditions of registration or any directive,
circular or order issued by the Commission, the Commission, after providing a
reasonable opportunity of representation to the Debt Securities Trustee may:
(a)
impose a restriction on its activities as Debt Securities Trustee;
(b)
suspend its registration; and/or
(c)
impose a penalty provided under sub-section (2) of
Section 506A of the Ordinance.
(2)
Notwithstanding anything contained in sub-regulation
(1), where the Commission is satisfied that a delay in suspension of
registration of the Debt Securities Trustee will be detrimental to the interest
of investors or the public in general or the capital market, the Commission may
immediately suspend the registration of the Debt Securities Trustee till the
time an opportunity of hearing is provided to the Debt Securities Trustee and a
final order is passed under sub-regulation (1):
Provided that
where the Commission suspends the registration under sub-regulation (2), the
opportunity of hearing and final order must be passed within sixty days of the
order under sub-regulation (2).
(3)
A Debt Securities Trustee whose registration has been
suspended shall not act as a Debt Securities Trustee for any new Issue during
the period of suspension and remove the cause of suspension as specified in the
suspension order within a period of one hundred and twenty days from the
receipt of the suspension order or such earlier period as provided in the said
order.
(4)
The Commission while suspending the registration of a
Debt Securities Trustee may impose such conditions as it deems
appropriate.
13. Cancellation of
Registration.__ (1) The Commission, after providing a reasonable
opportunity of representation to the Debt Securities Trustee, may cancel the
registration of a Debt Securities Trustee if,-
(i)
in the opinion of the Commission the Debt Securities Trustee has been in violation
of these Regulations or the Trust Deed or restriction imposed under
subregulation (1) of Regulation 12;
(ii)
it is found guilty of fraud; or
(iii)
its registration has been suspended and the cause of
suspension has not been removed within
one hundred and twenty days from the receipt of the suspension order or
such earlier period as provided through the order of suspension .
(2)
The registration of a Debt Securities Trustee shall
stand automatically cancelled if such Debt Securities Trustee,-
(i)
is declared insolvent by a Court;
(ii) is
wound up by an order passed by a Court, or
(iii) ceases
to hold valid license/registration as a Schedule Bank, Development Finance
Institution or Investment Finance Company.
(3)
Upon the cancellation of the registration, the Debt
Securities Trustee shall with immediate effect cease to solicit or enter into
further business as a Debt Securities Trustee and transfer all necessary record
to another Debt Securities Trustee appointed by the issuer, within thirty days
of its appointment and the appointment of the new Debt Securities Trustee,
shall be immediately communicated to the Commission, Debt security holders and
the stock exchanges concerned in case of listed debt securities.
14.
Dissemination
of information regarding cancellation of registration.__ The
Issuer upon cancelation of registration of the Debt Security Trustee by the
Commission shall immediately notify such cancelation for information of the
stakeholders, through press release in at least two newspapers, one English and
one Urdu language, having wide circulation in the country.
15.
Relaxation:
Where the Commission is satisfied that it is not practicable to comply with any
of the requirements of these regulations in a particular case or class of
cases, the Commission may for reasons to be recorded, relax such requirement(s)
subject to such condition(s) as it may deem fit.
***
FORM
A
[see
regulation 5(1)]
APPLICATION FOR GRANT OF
CERTIFICATE OF REGISTRATION AS DEBT SECURITIES TRUSTEE
(Please carefully
read the instructions annexed to this Form)
To,
The Securities and Exchange
Commission of Pakistan
Pursuant to the decision of the
Board of Directors of …. [Name of the
applicant]..... taken in its meeting held on ……[Date of Meeting]….., we hereby apply for registration under
Regulation 5(1) of the Debt Securities
Trustee Regulations, 2012.
The information and documents
mentioned in Annexure-I are attached
herewith.
|
Date:
___________________________
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Signature:
__________________
|
|
Place:
___________________________
|
___________________________
Name of the Chief Executive Officer, the Company Secretary
or the Chief Financial Officer duly authorized by the Board of Directors
through a resolution for signing and submission of this application.
|
***
Annexure-I (see
Form A)
1.
General and
business Information:
1.1 Brief
history of the applicant containing the name of the applicant; date and place
of its incorporation; date of commencement of business; length of experience as
Debt Securities Trustee, if any; names of its sponsors/promoters/major
shareholders; group structure, if any and status of the applicant whether
Scheduled Bank, Development Finance Institution as notified by the State Bank
of Pakistan, Investment Finance Company or other.
1.2 Address
of the Registered Office of the applicant (postal address, postal code,
telephone & fax numbers).
1.3
Name and designation of the compliance officer along
with contact detail i.e. postal address, postal code, telephone number, fax
number and e-mail address.
1.4
Detail of ongoing legal or regulatory proceedings, if
any, initiated against the applicant or any of its directors, Chief Executive
Officer, Chief Financial Officer or Company Secretary by the Commission or any
other regulatory authority.
1.5
Detail of penal or regulatory action(s), if any, taken
against the applicant during the last three years by the Commission or any
other regulatory authority.
1.6 In
case any associated company of the applicant is already registered under these
Regulations, the following details shall be provided: i) Name of such
associated company;
ii) Detail of warning
notices, if any, issued to such associated company by the
Commission during the
last three years; iii) Detail of ongoing legal proceedings, if any initiated against
such associated company or any of its directors, Chief Executive Officer, Chief Financial
Officer or Company
Secretary , by the Commission; or
any other regulatory authority; and iv) Penal action, if any, taken against such
associated company by the Commission during the last three years.
2.
Other
Information:
2.1
Detail of pending disputes:
|
Nature of dispute
relating to the Trusteeship business of the
Applicant
|
Name of the party
|
Name & Place of Court
/ Tribunal where dispute is pending
|
Amount
Involved
|
Date of last hearing
|
Decision taken in the
last hearing
|
|
|
|
|
|
|
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2.2
List of financial or criminal offenses which have been
alleged against the applicant or any of its sponsors, directors or employees
during the last three years.
2.3
Procedures for redressal of complaints, if any, lodged
by the Debt securities holders.
2.4
Any other information considered relevant to the
business of the applicant as Debt Securities Trustee.
2.5
Any significant awards or recognition.
3.
List of
documents to be provided along with application:
3.1 copy
of Memorandum & Articles of Association of the applicant, certificate of
incorporation and certificate of commencement of business
3.2 copy
of Form 3, 27, 28 and 29 of the applicant duly certified from the Company
Registration Office (CRO) concerned.
3.3 audited
accounts of the applicant for the last three years and latest half yearly and
quarterly accounts.
3.4 profile
of Chief Executive Officer, Chief Financial Officer, Company Secretary,
Compliance Officer and Directors, of the applicant [Name, Qualification,
Experience and Date of Appointment, Directorship in other companies and Date of
Appointment as director in such other companies].
3.5 date
wise breakup of Issues, if any, in which the applicant acted as Debt Securities
Trustee during the last three years. The statement should also contain size of
each Issue.
3.6 list
of Issues, if any, in which the applicant has enforced security or taken any
other remedial action for safeguarding the interest of its debt securities
holders.
3.7 an
Affidavit as specified in Annexure-II signed
by the Chief Executive or any director of the applicant authorized by the Board
of Directors to do so through resolution passed in its meeting.
3.8 confirmation
that the quantum of minimum capital or equity, as the case may be, required
under the respective statute is maintained.
3.9 any
other information/document as required by the Commission.
*Instructions:
(i)
The applicant must submit application for registration
under regulation 5 on this form duly filled in and signed, together with
supporting documents to the Commission.
(ii)
All columns of the application form should be filled
in. In case a column is not relevant or not applicable, the same should also be
filled in as “Not Applicable” or “Not Relevant”.
(iii)
Information, which needs to be supplied in more details
may be provided on separate sheet(s) and attached to the application.
***
Annexure-II
(see
clause 3.7 of Annexure-I)
AFFIDAVIT
(On Stamp Paper of appropriate value)
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 the chief executive/director of ..…name of
the applicant)…. and as such I am well conversant with the facts deposed to
below.
2.
That the statements made and the information and
documents provided along with the application for registration as a Debt
Securities Trustee under the Debt Securities Trustee Regulations, 2012 are
correct and there are no facts which have been concealed.
3.
That the Securities Exchange Commission of Pakistan
(the Commission) will be notified of any change in the information provided to
it along with the application for registration under regulation 5 of the Debt Securities Trustee Regulations, 2012
during the period the applications for registration is being considered and
after the grant of registration.
4.
That all the documents provided to the Commission are
true copies of the originals.
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
Signature_____________
The Deponent is identified by
me.
Signature_____________
ADVOCATE
(Name
& 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 & Seal) ***
FORM
B
[see
regulation 6(2)]
SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN
***
CERTIFICATE OF REGISTRATION TO ACT AS DEBT SECURITIES TRUSTEE
Islamabad, the …..
(date)…………
Registration No. ………………….
1.
The Securities and Exchange Commission of Pakistan
having considered the application for registration as a Debt Securities Trustee under Regulation 5(1)
of the Debt Securities Trustee
Regulations, 2012 (the Regulations) by
…… [Name of the applicant] ……. and
being satisfied that the said ......[Name
of the applicant]…… is eligible for registration and that it would be in
the interest of the securities market so to do hereby grants Certificate of
Registration, in exercise of the
powers conferred under regulation 6(2) of the Regulations to .…[Name of the applicant]…. as a Debt Securities Trustee to carry out the
activities as specified in the Regulations subject to the condition that ….[Name of the applicant]…. shall comply
with all the provisions of the Regulations and to any other condition that may
be imposed hereafter.
2.
Unless cancelled or suspended this certificate of
registration is valid for a period of three years from the date of its issuance
or the existence of …..[Name of the
applicant]….., whichever is earlier provided that it remains eligible under
the Regulations for registration as a
Debt Securities Trustee.
For and on behalf of the
Securities and Exchange Commission of Pakistan
Authorized Signatory
***
FORM
C
[see
regulation 7(1)]
APPLICATION FOR GRANT OF
RENEWAL OF CERTIFICATE OF REGISTRATION AS DEBT SECURITIES
TRUSTEE
(Please carefully
read the instructions annexed to this Form)
To,
The Securities and Exchange
Commission of Pakistan
Pursuant to the decision of the
Board of Directors of …. [Name of the
applicant]..... taken in its meeting held on ……[Date of Meeting]….., we hereby apply for renewal of registration as Debt Securities Trustee under regulation 7(1) of the
Debt Securities Trustee Regulations, 2012. The information and documents
mentioned in Annexure-III are
attached herewith.
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Date:
___________________________
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Signature: __________________
|
|
Place:
___________________________
|
___________________________
Name of the Chief
Executive Officer, the
Company
Secretary or the Chief Financial Officer duly authorized by the BoD through a
resolution for signing and submission of this application..
|
***
Annexure-III
(see Form C) The following
details shall be provided by a Debt Securities Trustee along with the relevant
supporting documents: -
1.
Detail of non-compliance, if any, by the Debt
Securities Trustee with any provision of the Debt Securities Trustee
Regulations, 2012 and reasons thereof.
2.
Detail of non-compliance, if any by the Debt Securities
Trustee with any provision of any Trust Deed to which it is a party and reasons
thereof.
3.
Detail of the Issue(s) of securities for which the Debt
Securities Trustee remained engaged during the last one year.
4.
Detail of legal proceedings initiated against the Debt
Securities Trustee and penal actions taken against it by the Securities and
Exchange Commission of Pakistan or any other regulatory authority during the
last one year.
5.
Detail of changes, if any, in the status of the Debt
Securities Trustee.
6.
Detail of complaints relating to the Issue of Debt
Securities received in the capacity as Debt Securities Trustee during the last
one year and their status.
7.
Detail of default, or delay in profit payment or
redemption, if any, by the issuers including the following:
a)
the action taken by the
Debt Securities Trustee to safeguard the interest of debt securities holders;
b)
mode of enforcement of security, if any; and
c)
compensation provided to debt securities holders.
For and on behalf of ….. (Name of the applicant)….
|
Date:
___________________________
|
Signature:
__________________
|
|
Place:
___________________________
|
___________________________
Name of the Chief Executive Officer or any
|
director of the applicant
authorized by BoD to submit the above-mentioned information.
*Instructions:
(i)
The applicant must submit application for registration
under regulation 7 on this form duly filled in and signed, together with
supporting documents to the Commission.
(ii)
All columns of the application form should be filled
in. In case a column is not relevant or not applicable, the same should also be
filled in as “Not Applicable” or “Not Relevant”.
(iii)
Information, which needs to be supplied in more details
may be provided on separate sheet(s) and attached to the application.
***
FORM
D
[see
regulation 7(2)]
SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN
*****
CERTIFICATE OF RENEWAL OF
REGISTRATION AS DEBT SECURITIES TRUSTEE
Islamabad, the …..
(date)…………
Registration No. ………………….
1.
The Securities and Exchange Commission of Pakistan
having considered the application of the Debt Securities Trustee for renewal of
its registration under regulations 7(1) of the Debt Securities Trustee
Regulations, 2012 by …… [Name of the
applicant] ……. and being satisfied that the said ......[Name of the applicant]…… is eligible for renewal of registration
and that it would be in the interest of the securities market so to do hereby
grants renewal of Certificate of
Registration, in exercise of the
powers conferred under regulation 7(2) of the Regulations to .…[Name of the applicant]…. as a Debt
Securities Trustee to carry out the activities as specified in the Regulations
subject to the condition that ….[Name of
the applicant]…. shall comply with all the provisions of the Regulations
and to any other condition that may be imposed hereafter.
2.
Unless cancelled or suspended this renewal of the certificate
of registration is valid for a period of one year from the date of the issuance
of this certificate of renewal or the existence of
…..[Name of the applicant]….., whichever is earlier provided that it
remains eligible under the Regulations for registration as a Debt Securities
Trustee.
For and on behalf of the
Securities and Exchange Commission of Pakistan
Authorized Signatory
***
SCHEDULE I
CONTENTS OF TRUST DEED
[see regulation
9(ii)]
The Trust Deed should contain
all the necessary terms and conditions including the following:
1. The
Issuer
All obligations and responsibilities of the issuer under the
Regulations, the Ordinance, the Act, the
Trust Act and any other applicable law
or directions by the Commission including the following:
(i)
its obligation for maintaining proper record of its
books of accounts and keeping it open for inspection by the Debt Securities
Trustee;
(ii)
its obligations for maintaining proper register of debt
securities holders with their addresses, record of subsequent transfers and
changes of ownership;
(iii)
its obligations for facilitating the Debt Securities
Trustee to enter its premises and inspection of the charged assets, if any;
(iv)
its obligations for intimating the Debt Securities
Trustee of all orders, directions, notices of the courts of law affecting or
likely to affect the charged assets or interest of the debt securities holders;
(v)
its obligations for submitting any document or
information including copies of financial reports; auditor’s certificate on
maintaining minimum redemption reserve fund, if required; report on redemption
of debt securities; report on conversion of debt securities, if they are
convertible; report on dividend payment,
contracts relating to the Issue and
detail of the assets backing the debt security etc. as and when required
by the Debt Securities Trustee;
(vi)
its obligations for keeping the charged assets, if any,
in proper condition; vii) its
obligation to pay the profit and the principal amount; viii) its obligation to seek prior
consent of the Debt Securities Trustee for declaration of any dividend, if so
required by the Trustee;
ix)
its obligations for reporting to Debt Securities
Trustee before any change in the nature and conduct of business of the issuer;
x)
its obligations for submitting periodical report on
semi-annual basis to the Debt Securities Trustee containing at least the
following: a) register of debt securities holders;
b)
number and nature of grievances received by the issuer
from debt
securities holders and status of
resolution thereof;
c)
amount of markup due but unpaid and reasons for
non-payment thereof and detail of unclaimed/undelivered payments, if
any;
d)
a declaration confirming that its assets which are
available by way of security are sufficient to discharge the claims of the debt
securities holders as and when they become due.
(xi)
its obligations for submission of its annual audited
accounts to the Debt Securities Trustee within thirty (30) days from the date
of the general meeting in which such accounts are approved;
(xii)
its obligations to conduct and manage its business
affairs with due diligence and efficiency in accordance with sound financial
practices;
(xiii)
its obligations to inform the Debt Securities Trustee
about the material change in its shareholding structure and the Board of
Directors;
(xiv)
its obligations to provide the Debt Securities Trustee
information about its financial condition, business and operations as and when
requested by the Debt Securities Trustee;
(xv)
its obligation to inform the Debt Securities Trustee
regarding any change in the utilization of proceeds of the Issue where the offering document sets
out specific purpose for the utilization of the proceeds of the issue;
(xvi)
its obligations to furnish to the Debt Securities
Trustee copies of all documents, reports, notices, circulars and particulars
which the issuer provides to its creditors;
(xvii)
its obligations to immediately inform the Debt
Securities Trustee of the occurrence of any event of default;
(xviii)
its obligations that until all the amounts payable by
the issuer in relation to the debt security have been paid in full to the
satisfaction of the Debt Securities Trustee, the issuer shall not without prior
written consent of the Trustee;
(a)
sell, transfer or otherwise dispose of, except in the
ordinary course of business, any of the charged assets or more than 20 per cent
of its undertaking or assets or permit any merger, consolidation, dismantling
or reorganization;
(b)
create or permit to subsist any pari passu or superior security interest over the charged assets or
any portion thereof except in accordance with intercreditor agreement if any,
to which the Debt Securities Trustee is a party;
(c)
demolish or remove any part of the buildings which are
part of the secured assets or the fixtures and fittings annexed thereto except
in the ordinary course of repair, maintenance, replacement or improvement;
(d)
change its memorandum or articles of association, in a manner that may adversely
affect its ability to perform its obligations in respect of the debt security Issue;
(e)
take any action which is likely to result in a material
adverse change in the Issue; and
(f)
declare or pay any dividends after the occurrence of
any event of defaults.
(xix)
its obligation to ensure that the assets of the Issuer
backing the debt security are maintained and sufficient to discharge its
obligations as the issuer
(xx)
its obligation to ensure that all information provided
to the Debt Securities Trustee relating to the issue is accurate and that it
has not concealed any material
facts/information.
2.
Purpose and
salient features of the Issue
Complete detail and information regarding the following:
(a)
Purpose of the Issue, utilization of the proceeds
thereof and Issue size.
(b)
tenure of the Issue.
(c)
markup/coupon rate.
(d)
redemption schedule.
(e)
options like call option, put option and conversion
option, if any, and in case of conversion option, the conversion
procedure.
(f)
debt equity ratio( the company’s long term debt/equity
ratio and the company’s total debt/equity ratio both before and after the
issuance of the debt security).
(g)
debt service coverage ratio, if applicable.
3.
Details of
the assets backing the debt security if applicable; (a) Nature of the assets.
(b)
Book value of the assets as per the latest audited
accounts of the issuer.
(c)
Nature of the existing charge(s) viz floating,
exclusive, pari passu, ranking etc. on the charged assets and total amount of
such charges.
(d)
Nature of charge(s) established in favor of the Debt
Securities Trustee.
(e)
Circumstances under which security becomes enforceable.
(f)
Restriction on the issuer with respect to creation of
further charges or encumbrances of the assets without the consent of Debt
Securities Trustee.
(g)
Minimum amount of the security to be maintained at all
times during the tenure of the debt security.
(h)
Procedure for successive valuation of the assets
backing the debt security.
(i)
Procedure for inspection of the charged assets and
books of account by the Debt Securities Trustee or any person or persons
authorized by it.
(j)
Mechanism for preservation of the assets backing the
debt security.
(k)
Circumstances under which the security may be disposed
off or leased out with the approval of the Debt Securities Trustee.
4.
Procedure
for Enforcement of Security and related risk factors
The procedure for enforcement of
security in case of default by the issuer and risk factors connected to the
enforcement of security should be provided in detail.
5.
Representation
and Warranties
Details regarding the issuer
representation and warranties regarding any issue or creation of trust or the
clause that execution of this declaration shall not contravene the memorandum
and articles of association of the Issuer, any agreement which constitute legal
and binding obligation of the issuer etc.
6.
Details of the agreements executed by the issuers
with its creditors and covenants thereof.
7.
Events of
Default
All the events, which if
occurred shall require the Debt Securities Trustee to initiate the actions,
proceedings including enforceability of the security for safeguarding interest
of the debt securities holders, should be defined
8.
Rights of
Debt Securities Trustee in case of issuer’s default:
(i)
right of the Debt Securities Trustee to inspect any
document of the issuer relating to the Issue including the books of accounts,
contracts relating to assets backing the debt security, the register of debt
securities holders and shareholders etc. and to take copies and extracts
thereof.
(ii)
a statement whether, in case of default, the Debt
Securities Trustee has the right to appoint nominee director(s) on the board of
the issuer or not.
(iii)
right of the Debt Securities Trustee to call meeting of
the debt securities holders, the events under which such meeting may be called
and minimum quorum for the meeting of debt securities holders.
(iv)
right of the Debt Securities Trustee to approach a
court of competent jurisdiction in the event of any default by the issuer and
its failure to comply with the covenants of the Trust Deed.
9.
Rights of
the debt securities holders
(i)
right of the debt securities holders to call meetings;
(ii)
to vote at the meetings of the debt securities holders;
(iii)
in the event the Debt Securities Trustee, upon
receiving instructions from the debt securities holders in accordance with the
provisions of the Trust Deed, refuses or fails to act in accordance with such
instructions, then any of the debt securities holders, holding such number of
debt securities as specified in the Trust Deed, may, on giving the Trustee a
notice in writing of its intention to initiate proceedings against the issuer;
(iv)
to replace the Debt Securities Trustee if it
contravenes any of its obligations under the Trust Deed and procedure for such
replacement.
(v)
to replace the Debt Securities Trustee if it
contravenes any provision of the Regulations or the Ordinance or the Act.
10.
Duties of
Debt Securities Trustee
All obligations and duties of the Debt Securities Trustee
under the Regulations, the Ordinance, the Act, the Trust Act, 1882 and any
other applicable law including the following:
(i)
its obligation to regularly monitor payment of profit
to the debt securities holders and redemption of the debt security and ensure
that it is according to the redemption schedule provided to the debt securities
holders.
(ii)
its obligation to monitor delay or default in payment of
profit and redemption of principal amount to the debt securities holders.
(iii)
its obligations towards regularly monitoring compliance
by the issuer with all the covenants of the Trust Deed.
(iv)
its obligations of reporting to the debt securities
holders about actual or potential breaches of its own or the issuer’s
obligations along with remedial steps taken or to be taken and the manner and
time period during which the debt securities holders shall be informed of such
breaches.
(v)
its obligations to initiate legal proceedings against
the issuer where the issuer refuses or fails to fulfill its obligations under
the Trust Deed.
(vi)
its obligation to
monitor on semi annual basis the quantum of security, where the Issue is
secured, and to ascertain whether the security of the issuer backing the debt
security is sufficient to discharge the claims of debt securities holders as
and when they become due.
(vii)
its obligation incase of impairment of the security;
and
(viii)
its obligation to enforce security, where necessary, in
the interest of the debt securities holders.
11.
Removal and
Resignation of the Debt Securities Trustee
(i)
Provide in details the instances and procedure for the
retirement, removal and resignation of the Debt Securities Trustee including
appointment of new Debt Securities Trustee.
(ii)
Procedure for modifications/rectification in the Trust
Deed.
(iii)
clause prohibiting any unilateral modification/
amendment by either party to the Trust Deed.
12.
Miscellaneous
(a)
Provisions for redressal of grievances of debt
securities holders.
(b)
Provision that the Debt Securities Trustee shall not
relinquish from its assignment unless another Debt Securities Trustee is
appointed.
(c)
fee or commission of the Debt Securities Trustee.
(d)
Provisions relating to the quorum, voting, whether
meeting of the debt securities holders may be convened by the issuer, the Debt
Securities Trustee and/or by the debt securities holders, minimum holding for
convening meeting by debt securities holders etc.
(e)
Conditions under which the provisions of Trust Deed or
the terms and conditions of the issue may be changed.
(f)
Provisions relating to the creation and maintenance of
redemption reserve fund, if any.
(g)
Indemnification of the Debt Securities Trustee.
Note:
(i)
The arrangement for rendering services as Debt
Securities Trustee does not absolve the issuer of the obligations and
responsibilities placed on it under the Ordinance, the Act, the Securities and
Exchange Ordinance, 1969 and these Regulations.
(ii)
The Debt Securities Trustee may incorporate additional
clauses, provided that the additional clauses do not dilute or contravene the
provisions of the Regulations particularly of the above clauses.
***
SCHEDULE II
CODE OF CONDUCT
[see regulation 9]
The Debt Securities Trustee shall follow the following code of
conduct:
1.
A Debt Securities Trustee shall protect the interest
and rights of the debt security holders in accordance with the Trust Deed.
2.
The Debt Securities Trustee shall ensure that:
(i)
any change in registration status which may adversely
affect the interest of the debt securities holders is promptly notified to the
issuer, the Commission and in case of listed debt securities to the stock
exchange concerned; and
(ii)
where the Debt Securities Trustee cease to act as a
Debt Securities Trustee for the Issue, its business relating to the Issue is
transferred to another trustee in consultation with the issuer.
3.
A Debt Securities Trustee shall take all reasonable
steps to establish the true and full identity of the issuers and maintain
proper record of the charged assets, if any, and the financial and operating
position of the issuer.
4.
A Debt Securities Trustee shall not discriminate among
the issuers.
5.
A Debt Securities Trustee shall share information
regarding the Issue available to it with the concerned credit rating company,
if so desired by such credit rating company.
6.
A Debt Securities Trustee shall provide the issuer and
debt securities holders with adequate and appropriate information about its
trusteeship business, including contact details, services available to issuers,
and the identity and status of employees and other persons acting on its behalf
with whom the issuer may have to interact.
7.
A Debt Securities Trustee shall not indulge in any
unfair competition, which is likely to harm the interests of other Debt
Securities Trustee.
8.
A Debt Securities Trustee shall ensure that the
information shared with the debt security holders through correspondences or
other means is correct, adequate, comprehensive and not misleading to the best
of his knowledge and belief and is shared on timely basis.
9.
A Debt Securities Trustee shall ensure that its
directors or managers having the management of the whole or substantially the
whole of affairs of the trusteeship business, shall not either through its
account or their respective accounts or through their associates or family
members, relatives or friends indulge in any insider trading.
10.
A Debt Securities Trustee or any of its directors,
employees, officers, etc. shall not divulge to anybody either orally or in
writing, directly or indirectly, any confidential information about its clients
which has come to its knowledge, without taking prior permission of its
clients, except where such disclosures are required to be made in compliance
with any law.
11.
A Debt Securities Trustee shall ensure that:
(i)
inquiries from debt securities holders are adequately
dealt with; and
(ii)
grievances of debt securities holders are redressed in
a timely and appropriate manner.
12.
A Debt Securities Trustee or any of its directors,
employees, officers, etc. dealing with trusteeship business shall not render,
directly or indirectly, any investment advice about any security in the media,
whether real-time or non-real-time unless a disclosure of interest including
long or short position in the said security has been made, while rendering such
advice.
13.
A Debt Securities Trustee shall be responsible for the
acts or omissions of its employees and agents in respect to the conduct of its
business.
14.
Debt Securities Trustee shall provide adequate freedom
and powers to its compliance officer for the effective discharge of its duties
under these Regulations.
15.
A Debt Securities Trustee shall ensure that good
corporate policies and corporate governance is in place.
16.
A Debt Securities Trustee shall not disclose the non-public
price sensitive information it has due to its position as a trustee to any
person.
17.
Debt Securities Trustee shall call for periodical
reports regarding profit payment and redemption of the debt security from the
issuer.
18.
A Debt Securities Trustee shall inspect books of
accounts, records, registers of the issuer and the security to the extent
necessary for discharging its obligations under the issue of debt security.
19.
Debt Securities Trustee shall maintain high standard of
integrity and fairness in performing its functions and discharging all its
obligations under these Regulations in a fair, efficient, transparent and
ethical manner.
20.
A Debt Securities Trustee shall make every possible
effort to avoid any conflict of interest relating to its trusteeship business
with the issuer and in case conflict of interest exists, the Debt Securities
Trustee shall immediately make a disclosure of the same to the debt securities
holders, the stock exchange concerned in case of listed debt security and the
Commission and shall try to resolve that conflict in an equitable manner.
______________________________________________________________________________
[No.SMD/Misc./(Prosp)/19/2003]
ABDUL
REHMAN QURESHI,
Advisor/Secretary.
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