The Securities and Exchange Commission of Pakistan (SECP) has brought another administrative structure for non-saving money fund organizations (NBFCs). It has corrected the NBFC (Establishment and Regulation) Rules, 2003 and Notified Entities Regulations, 2008.
The change has been made to meet the needs of low-income people and micro enterprises. A new class of NBFCs has been introduced, called the non-bank micro-finance companies (NBMFCs). A comprehensive framework has been introduced to enable appropriate financial facilities for micro enterprises and low-income persons. A set of conduct requirements have also been detailed.
The new regulatory regime entitles the micro-lending business as a regulated activity. All entities, other than microfinance banks, involved in the microfinance business, will have to apply for a license from the SECP to continue offering their services.
To create awareness about the regulatory framework amendment for NBMFCs, the SECP arranged a conference at the commission’s office. The SECP was represented by officers of the Prosecution and Legal Affairs Department (PLAD), Specialised Companies Division (SCD) and Corporatisation and Compliance Department (CCD).
Near 40 members from various organizations and foundations, including the CEO of Pakistan Microfinance Network (PMN) and authorities of the Pakistan Poverty Alleviation Fund (PPAF), went to the gathering.
The target of the intelligent gathering was to bring the matter of the administrative correction into the NBMFC’s consideration. The session additionally permitted the SECP to get criticism from mechanical members and find out about their down to earth challenges with the alteration, address their worries and inquiries for a smoother move of unregulated microfinance foundations into managed NBMFCs.
ECP’s SCD team briefed the attendants about the noticeable and prominent features of the regulatory framework. All of the participants’ queries were answered and it was made clear that after the launch of the new regulatory regime, micro lending has officially become a regulated activity. All the entities related to the microfinance business (other than microfinance banks) will have to come within the SECP’s regulatory domain. Any violation of the regulations or continuation of the activities without approval will be considered as a criminal offence.
In any case, the SECP guaranteed that it would proceed with backing and offer help amid the move stage to every single influenced entitie……
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