Non Bank Finance Companies 2

PRESENTED TO:
PROF: SHEIKH USMAN YOUSAF
NON-BANKING FINANCE COMPANIES

NBFCs
PRESENTED BY: M06MBA014 5/15/2008
AMAD-UD-DIN FAROOQI
2NON-BANKING FINANCE COMPANIES
CONTENTS
Non-Banking Finance Companies Difference between commercial banks and NBFCs Incorporation of NBFC Powers of the SECP in Regulating NBFC Restrictions Imposed By SECP on NBFC for Ceiling of Fraud 4 4 5 5 6
Investment Finance Company (IFC)
Money Market Activities Capital Market Activities Maturity Period of COI & CD Application of Resources Raised Through COI or CD Project Financing Activities Corporate Finance Services General Activities Limits on the Total Investment in Equities (IFC) The Maximum Exposure to Any Single Issuer By NBFC (IFC)
May 15, 2008
7 7 7 8 7 7 8 8 8 9
Limits on Margin Loans by NBFC (IFC)
Investment Companies & Investment Advisory Services Unit Trust or Mutual Fund
HAILEY COLLEGE OF BANKING AND FINANCE
10 10
Open-End Fund Close-End Fund
11 11
Investment Companies & Investment Advisory Services
12
Structure 1 Structure 2
13 14
Asset Management Company Remuneration Payable to Asset Management Company Venture Capital Companies Venture Capital Company (VCC) Venture Capital Fund (VF) Venture Capital Investment (VI)
15 15 17 17 18 18
Leasing Services Discounting Services Housing Finance Services Prudential Regulations Regarding NBFCs Status of Securities Issued By NBFC
May 15, 2008
18 19 19 20 20 20 20 21 21
Unsecured / Clean Financing Facility to an NBFC by A Bank Limit on Total Exposure on an NBFC Assuming Obligations on Behalf of NBFC Repealed Laws
List of NBFCs Operating in Pakistan Annexure Form-I (For Incorporation of an NBFC) Annexure to Form-I (Information to Be Supplied with form 1) Form-II (Application for Obtaining License for NBFC) Form III (License to Carry Out As NBFC by SECP) Form IV (Application for Renewal of License) Form V (License to Carry On As NBFC by SECP) Form VI (Application for License as A Venture Capital Fund) Annex to Form VI (Information to be Enclosed with Form VI) Form VII (License to Carry On As Venture Capital Fund by SECP) Form VIII (Application to Renew License as Venture capital Fund) Form IX (License to Carry On Venture Capital Fund By SECP) Form X (Application to Register As an Investment Company) Annex to Form X (Information to be Enclosed with Form X) Form XI (Certificate of Registration as an Investment Company By SECP) Form XII (Information in the Application to Authorize As Closed-End Scheme) Form XIII (Information in the Application to Authorize As Unit Trust Scheme)
22 24 24 24 26 27 28 29 30 30 32 33 34 35 35 37 38 40
May 15, 2008
Non-Banking Finance Companies

There are different types of institutions involved in financial services. These include commercial banks, development financial institutions (DFIs) and non-banking finance companies (NBFCs). Unlike DFIs e.g. ADBP and PICIC, that have a specified objective at priority besides efficient business conduct, NBFCs are formed purely with the commercial objectives. NBFCs provide range of financial services to their clients. Types of services that fall under the domain of non-banking finance services include the following: 1. 2. 3. 4. 5. 6. 7. Investment Finance Services Investment Advisory Services Asset Management Services Venture Capital Services Leasing Services Housing Finance Services Discounting Services 8. Any other form of business activities which the Federal Government may, by notification in the official gazette, specify from time to time. SECP is the regulatory authority of NBFCs in Pakistan and it regulates the affairs of any NBFC through NBFC Establishment & Registration Rules, 2003 issued as at April 01, 2003 in Islamabad by SECP
Difference between an NBFC & commercial bank

The distinction between banks and NBFCs has been gradually getting blurred, both offering the same spectrum of services the only exception is the exclusive privilege of commercial banks in the field of:
May 15, 2008
Banks and NBFCs both are incorporated under companies ordinance 1984 but a banking companys operations are regulated by the banking companies ordinance 1962 whereas, an NBFC is regulated by NBFC Establishment & Registration Rules, 2003 The regulatory authority for commercial banks is State Bank of Pakistan but regulatory authority for an NBFC is SECP The difference between a bank and an NBFC has narrowed. Other than deposit taking activity, the assets are largely similar. The NBFCs have an advantage in management of risks. I would say. Apart from this there is always the adaptability to change where the NBFCs are fast. Newer banks are also quite like that. Banks offer you a checking account to release funds to the depositors which is not done by the NBFCs Nowadays, NBFCs are prominent in a wide range of activities like hire purchase finance, equipment lease finance and consumer finance where there is a high gap
between the demand and supply of funds and established banking entities are not accessible to the borrowers. The importance of NBFCs lies in delivering credit to unorganized sectors and to the small borrowers.
Incorporation of an NBFC
a. To conduct any one or more type of non-banking business, prior permission of the SECP (the Commission) is required. b. In non-banking services, there by default vest more responsibilities and duties over the companys management (sponsors, proposed directors, chief executive and chairman of the Board of Directors), hence the Commission before granting license shall ensure that the board of directors comprises personnel with adequate qualification, expertise and integrity e.g. have no record of corruption, insolvency or default. c. If the Commission grants permission to form an NBFC, the promoters of NBFC shall get the NBFC incorporated under the Companies Ordinance 1984 as a public company. d. After incorporation under the Companies Ordinance 1984, the directors shall make separate application to the Commission for the grant of license on a prescribed format (annexed at the end of this document) for carrying on each type of business along with a nonrefundable fee of Rs. 100,000 for each such license. e. The license granted by the Commission to NBFC would be valid for one year and each license shall be renewable annually on the payment of a fee of Rs.25,000 as mentioned in the annexed at the end. f. The company must have separate tiers of minimum equity in respect of each type of service it want to indulge in:

Investment finance services Investment advisory services Asset management services Venture capital investment Leasing Housing finance services Discounting services
300 million 30 million 30 million 5 million 200 million 100 million 200 million
Powers of the Commission in Regulating NBFCs

May 15, 2008
The Companies Ordinance 1984 gave the Commission following powers in regulating NBFCs: 1. Prior approval of the Commission is required to incorporate an NBFC. 2. After incorporation, NBFC needs license from the Commission to conduct any type of prescribed business. 3. The Commission may issue directions to any such company or may cancel any prior instructions or license of any NBFC.
4. The Commission is empowered to remove any director, chief executive, chairman
or any officer from the office of the company for a period up to 3 years.
5. The Commission is also empowered to supersede the Board of Director of the
company up to 3 years if board was found lacking fiduciary behavior.
Restrictions Imposed By SECP on NBFC for Ceiling of Fraud

To ensure that sponsors, proposed directors, chief executive and chairman of the Board of Directors will not commit any fraud SECP has made it mandatory that:
The NBFC will have to allot at least fifteen percent (15%) of its paid-up share capital to the promoters.
The companys promoters and directors will have to give an undertaking that they shall not dispose off their shares for a minimum period of three years from the date of commencement of business except with the prior approval of the SECP.
Not more than twenty-five per cent of its directors will be elected from the same family, including spouse, lineal ascendants and descendants, and brothers and sisters
They cannot purchase anything from, or sell anything to any director, officer, employee of the NBFC without the prior approval in writing of the Commission
They cannot transfer ownership of controlling shares, merge with, acquire or takeover any other company unless they have obtained approval from the SECP regarding such merger, acquisition or takeover.
May 15, 2008
The maturity period of certificate of investment shall not be less than three months, while the maturity period of a certificate of deposit shall not be less than thirty days
Now we take a look at each type of service that an NBFC can undertake.
Investment Finance Company (IFC)

Investment Finance Company is also known as investment bank or merchant bank. In Pakistan, there are many banks operating in this field as either full fledge merchant bank like Atlas Bank, Escorts Bank, First Dawood Bank, Jahangir Sidiqqui Bank, and some others carrying such services as wing operations beside their main operations. This includes many commercial banks and even DFIs like IDBP that besides being a Development Financial Institution is also a scheduled bank and is also serving as a merchant bank. However these hybrid institutions are operating under their respective regulations i.e. Prudential Regulations. Following services have been specified in the NBFC Rules that an IFC usually undertakes, but not limits to this: Money Market Activities
1. Issuing certificates of deposit or short-term commercial papers, of its own, or
investments of not less than thirty days maturity. 2. Trading money market instruments issued by its client, Government securities, promissory notes, bankers acceptances and other money market instruments, acting either as a broker or acting on its own account. 3. Act as a broker Capital Market Activities
1. Trade in listed securities both shares (equity instrument) and bonds (debt
2. 3. 4. 5.
6. 7.
instrument) Provide professional analysis of securities to both institutional and individual investor Underwrite stock and shares, TFCs and other obligations Manage portfolios of stocks and shares Manage pension funds of different enterprises (defined contribution plans for clients) Provide margin loans to individual and institutional investors Offer cash management accounts, security management accounts and to facilitate clients so that they are able to select various available investment alternatives at their discretion.
An NBFC That Is Licensed By the Commission to Undertake:
Leasing or Housing Finance Services may apply to the SECP for permission to issue Certificates of Investment (COI).
May 15, 2008
Investment Finance Services may apply to the SECP for permission to issue Certificates Of Deposit (CD).
Maturity Period of Certificate of Investment (COI) & Certificate Of Deposit (CD)

The maturity period of Certificate Of Investment (COI) is not to be less than three months
The maturity period of Certificate Of Deposit (CD) is not to be less than thirty days.
It should be noted that such certificates should be redeemable before its maturity period. Moreover, it is obligatory that the company applying for permission to issue Certificates of Investment or Certificates of Deposit has been actively engaged in the leasing or investment finance services or housing finance services business, as the case may be, for a period of two years. Moreover, the company has obtained credit rating of minimum Investment Grade from a credit rating agency registered with the SECP.
Application of Resources Raised Through COI or CD

It is obligatory that not less than fifteen percent (15%) of the resources raised through certificates of investment or deposit, excluding the certificates of investment or deposit held by financial institutions, shall be invested in Government securities or listed securities. Project Financing Activities 1. Underwrite public issue of securities 2. Guarantees loans and obligations 3. Open letter of credit for their corporate clients for imports Corporate Finance Services 1. Act as adviser and financial agent for companies in obtaining suitable credit from appropriate source with minimum cost 2. Assist companies in private placement of debt and equity securities 3. Advise companies in merger and acquisition 4. Prepare feasibility, market or industry studies for companies 5. Act as custodian for securities held by its clients 6. assist companies with cash management systems 7. raise equity, such as through venture capital, for new and existing companies, by acting as financial intermediary General Activities
1. Provide safe deposit vaults to clients.
May 15, 2008
2. Handle payments and collections for clients.
Limits on the Total Investment in Equities
The total investment in equities shall not exceed the liquid net worth of the NBFC. However, relaxation is given in case of equities taken up as consequence of underwriting commitment in which case this limit may be exceeded by the amount of equities taken up for a period of six months and risk assets shall not exceed ten times of the liquid net worth of the NBFC
May 15, 2008
The Maximum Exposure to Any Single Issuer, Associated Companies or Associated Issuer of Risk Assets by A NBFC Undertaking Investment Finance Services Maximum exposure to single issuer or associated issuer expressed as a per cent of the liquid net worth of the NBFC: Equity investment Margin Loan 10% of the liquid net worth 10% of the liquid net worth
Corporate financial paper & short-term commercial paper 35% of the liquid net worth Underwriting of shares and corporate financial paper 50% of the liquid net worth
LIMITS ON MARGIN LOANS BY NBFC
The aggregate of margin loans granted by a NBFC performing as IFC shall not exceed fifty per cent of its liquid net worth.
The margin to be maintained by the client shall not be less than thirty per cent of the loan amount Margin loans to a single client or associated clients (being the same, in the case of corporate bodies, as associated companies or associated issuers) shall not exceed ten per cent of the liquid net worth of the NBFC Margin loans shall be approved by a minimum two-third majority of the Board of the NBFC and shall not be granted to any employee, officer, director, or a shareholder having a beneficial ownership including that of close relatives of more than ten per cent in the paid-up capital of the NBFC
May 15, 2008

Investment companies should not be confused with investment finance companies that are also called merchant bank or investment banks. To understand investment advisory service and investment companies, it is important to understand Mutual Fund. Unit Trust or Mutual Fund Financial markets have always attracted large number of investors, and managing investment portfolios has always remained a specialized activity which was supposed to be left only with qualified and well experienced personnel. But does it mean that an investor with additional finance with no financial market experience would never be able to enter into the stock market? In absence of unit trusts, the answer is yes. So in simple words, unit trusts (mutual funds in American terminology) enables a layman investor to get direct benefit from financial markets that always promise highest returns but unfortunately yet logically with highest risks. Unit trust can be seen as a company that invests in marketable securities and manages investment portfolios to optimize return while bearing minimum risk. Unit trust collects money from smaller investors and manages diversified investment portfolios to maximize the unit-holders wealth. Unit-holders get the direct benefit of any dividend payment or capital appreciation through increase in the unit price which is quoted daily to reflect the fair value of net assets managed by the company.
Types of Mutual Funds
Open Ended Mutual Funds
Closed Ended Mutual Funds
There are two main types of such funds, open-ended fund and close-ended mutual funds. In case of open-ended fund, the fund manager continuously allows investors to join or leave the fund. The fund is set up as a trust, with an independent trustee, who keeps custody over the assets of the trust. Each share of the trust is called a Unit and the fund itself is called a Unit Trust. The portfolio of investments of the Unit Trust is normally evaluated daily by the fund manager on the basis of prevailing market prices of the securities in the portfolio. This market value of the portfolio is divided by the number of units issued to determine the Net Asset Value (NAV) per unit. An investor can join or
May 15, 2008
leave the fund on the basis of the NAV per unit. However, the Fund Manager may have a small charge called load added to the selling price or deducted from the redemption price of the units so as to cover distribution costs. In contrast, a close-end fund is similar to a listed company with respect to its main finance (share capital) as it issues fixed number of shares. These shares are not redeemable and are traded in the stock exchange like any other listed securities. Value of units of close-end funds is determined by market forces not directly by their NAV; even few investors believe that these are available at 20-30% discount to their NAV. Like listed securities, it is easy to trade close-end shares/units, whereas to acquire units of close-end fund, one has to fill some forms and visit the authorized dealers or designated offices who then issue certificate of ownership. Open-end fund i. ii. iii. iv. v. vi. vii. viii. Issues redeemable units Not necessarily listed Does not conduct general meetings of unit holders No voting rights of unit holders May issue as many units and redeem them at NAV Each time, units are directly acquired from or sold to the company through their authorized offices License of investment advisory is required Units are traded at NAV
Close-end fund i. ii. iii. iv. v. vi. vii. viii.

ix.
May 15, 2008
x.
xi.
Issues irredeemable shares Listed Conducts AGMs Bestow voting rights to shareholders Has fixed pool of money and does not continuously offer shares, however may increase its capital under the Companies Ordinance Shares are acquired from the company on initial public offer and from existing shareholders afterwards License of asset management services is required Shares are trades at market price rather NAV reported by the fund manager No closed-end fund shall invest more than twenty five (25%) per cent of its net asset value in securities of any one sector as per classification of the stock exchange. The investment of a closed-end fund in any other company or security shall not, at any time, exceed an amount equal to ten per cent (10%) of paid-up capital of the closed-end fund or an amount sufficient to acquire ten per cent of issued capital of that other company or issue, whichever is lower No closed ended fund can merge with, acquire or takeover any other closed-end fund
xii. xiii. xiv.
No closed ended fund can purchase any security in a forward contract No closed ended fund can purchase any security on margin No closed ended fund can apply for de-listing from stock exchange

In simple words, Investment Company is a company that raises capital to invest it into the securities of other companies. A company proposing to commence or continue business as an investment company shall be eligible for registration if:
It is a closed-end fund with equity of not less than one hundred million rupees.
Any company which is eligible for registration as an investment company may make an application as set out in Form X to the SECP for registration under these rules.
In case an investment company fails to commence business within six months from the date of registration, its registration shall be liable to be cancelled, unless the period has been extended by the Commission on receipt of application submitted by the company before the expiry of six months
It does not indulge in any production activities itself nor does it provide, say, any physical service. Instead it specializes in developing and managing profitable investment portfolios. Investment companies should not be confused with investment finance companies that are also called merchant banks or investment banks. An investment company must appoint an investment advisor (NBFC) that itself is a company, to manage its investment portfolios. Investment advisor acts as a management company of the investment company. NBFC may obtain a license to act as an investment advisor to manage its own close-end funds. An investment advisor by definition is a public company that manages close-ended fund of its own unit trust (fund) or of another investment company. Consideration of service for an investment advisor is the management fee it gets. This fee remains a fixed percentage of monthly average of net fair value of assets it managed. Thus more is the value of assets more the fee it would get. For illustration, we can discuss Arif Habib Investments (AHI) as an investment advisor which is currently maintaining three such close-end funds namely, Pakistan Capital Market Fund, Pakistan Premier Fund and Pakistan Strategic Allocation Fund.
May 15, 2008
Investment advisory appears a relatively less understood topic because of its two possible structures. NBFC Rules contain provisions for the both of the following structures without any separate classification that makes it little confusing for the reader.
Investment Advisory Services Can Be Classified Into The Following Two Structures: Structure 1:
Investment Advisor (NBFC)
Trustee
Close-Ended Scheme or Fund
Structure 1
In first structure, NBFC is shown as an investment advisor managing its own unit trust fund. Other players are trustee and the fund. A trustee is a company appointed to act as trustee through a trust deed (an agreement to safeguard the interest of scattered unit holders). This could be a bank, merchant bank (investment finance company) or a central depository company (CDC) that could be appointed as a trustee. AHI has CDC as a trustee for all of its close-end funds. Trustees are appointed to safeguard the interests of unit holders who have no such rights as available to shareholders. Trustees are appointed through a written trust deed that narrates rights and obligation of both the company and the trustee. Third element of first structure is the close-ended scheme through which the NBFC raises funds by issuing certificates to the public. These certificates entitle each certificate holder to receive, on demand, his proportionate share of the net assets of the scheme/fund. Investment advisor uses this fund to develop and manage investment portfolios (assets of the fund). As the market value of such assets increases, value of units does increase.
May 15, 2008
Structure 2:
Investment Advisor (NBFC)
Custodian
Investment Co (Any Public Co)
Structure 2
In second structure, NBFC is shown as providing investment advisory service to another company called Investment Company. Investment company is a separate public company and role of investment company in the whole structure is similar to the fund i.e. it raises the required amount by the issue of shares to the general public. So instead of certificate holders there are shareholders of the investment company having full rights and privileges as endured under the Companies Ordinance 1984 and there remain no need to appoint independent trustee to safeguard the interests of such shareholders. Instead of trustee, there is a role for custodian. Again a custodian could be a bank, a merchant bank or central depository company but role of custodian is quite limited in contrast to a trustee. A custodian has to just hold securities that investment advisor bought. These investments could even be held in the name of custodian to facilitate transfer. Unlike a trustee, a custodian has not to oversee the acts of investment advisor and there is no such safeguarding role as a trustee has to play. AHI again appointed CDC as its custodian. Investment Company appoints its investment advisor through a written contract. This contract among other things provides that the investment advisor shall bear all expenditure in respect of the secretarial and office space of the company and of professional management including all administrative, accounting and legal services. However fee payable on account of auditors fee, custodian fee, brokerage, stamp duty and any other duties or taxes connected with the sale or purchase of securities and taxes on income of the company shall be payable by the investment company. In close-end mutual funds, Investment Corporation of Pakistan (ICP) was the fist one to launch its 25 close-end mutual funds, ICP acted as a DFI and now its mutual funds have been taken over by PICIC and some by ABAMCO called lot A and lot B respectively.
May 15, 2008
Asset Management Company

Asset Management Company (NBFC)
Trustee
Open-ended Scheme
An NBFC may obtain a licence from the Commission to provide asset management service. An asset management company launches an open-end fund. An open-end fund does not have a fixed pool of money. The fund manager continuously allows investors to join or leave the fund. The fund is set up as a trust, with an independent trustee, who has custody over the assets of the trust. In contrast to close-end fund, an open-end fund always has trustee and for this, open-end fund is also called a unit Trust. The portfolio (pool) of investments of the unit trust is (normally) evaluated daily by the fund manager on the basis of prevailing market prices of the securities in the portfolio; this market value of the portfolio is divided by the number of units issued to determine the Net Asset Value (NAV) per unit. An investor can join or leave the fund on the basis of the NAV per unit, however, the fund manager may have a small charge called load added to the selling price or deducted from the redemption price of the Units so as to cover distribution costs. No NBFC licensed to perform as asset Management Company can:
Merge with, acquire or take over any other asset management company or a scheme Affect a short sale in a security whether listed or unlisted Accept deposits from a scheme Apply any part of its assets to real estate except property for its own use
May 15, 2008
Remuneration Payable to Asset Management Company

An NBFC licensed by the Commission to operate as an asset management company shall be entitled to a remuneration
During the first five years of a schemes existence, of an amount not exceeding three per cent of the average annual net assets of the scheme and Thereafter of an amount equal to two per cent of such assets
Currently Arif Habib Investments is managing three open-end funds namely, Pakistan Stock Market Fund, Pakistan Income Fund and Pakistan Sovereign Fund Metro Bank. This structure is similar to the Structure 1 as shown in the investment company and all three elements appearing play the same role as investment advisor, trustee and the fund.
May 15, 2008
Venture Capital Companies

Venture capitalist is a unique form of financing activity that is undertaken on the belief of high-risk-high-return. Venture capitalists invest in those risky projects or companies (ventures) that have success potential and could promise sufficient return to justify such gamble. In Pakistan, there is no venture capital company till now and commercial banks are to some extent bridging the gap however, in European Context 3i, among many others, is the name we must be familiar due to its large scale of successful venture activities. Venture capitalist not only provides finance but also often provides managerial or technical expertise to venture projects. It usually require equity stake in return or could simply prefer debt finance that is more secure than equity. There Are Broadly Three Legal Constituents of Venture Capital Mechanism:
Venture Capital Company (VCC) / (NBFC)
Venture Investment in Venture Projects. (VI in VP)
Venture Fund (VF)
May 15, 2008
1. Venture capital company (VCC) 2. Venture fund (VF) 3. Venture investment in venture projects. (VI in VP)
Venture Capital Company (VCC) is the NBFC licensed by the Commission to undertake venture capital activities.
Venture Capital Fund (VF) is a fund maintained by an NBFC with the minimum amount of 5 million to fulfill the SECPs requirement of separate tier of equity mentioned earlier. Venture capital investment (VI) means financing of any venture project by a VCC or by venture fund (in case it is also engaged in other services) being managed by an NBFC in venture projects. Venture Projects means a project which is in the start-up phase or undergoing expansion or engaged in a service, manufacturing or production activity based on a new process, service or technology or located in a remote or underdeveloped area of the country and is financed by a venture capital fund or a VCC.
Leasing Services
Leasing service includes the leasing of assets to other companies either on operating lease or finance lease. An NBFC may obtain license to commence leasing services. An NBFC Licensed To Deliver Leasing Services SHALL:
Invest at least seventy per cent of its assets in the business of leasing, Provided that cash and bank balances and investment in government securities shall be excluded to calculate investment in leasing business for purposes of this definition.
Provide facilities amounting to at least five per cent of its fund based facilities to small entrepreneurs; and
Acquire and maintain membership of Leasing Association of Pakistan and follow the code of conduct prescribed by the said Association;
However, An NBFC Licensed To Deliver Leasing Services SHALL NOT: 1. Hold, deal or trade in real estate except for use of NBFC itself 2. Engage in leasing operations pertaining to
May 15, 2008
a. Open land b. Buildings other than factory building, warehouses, hospitals, educational institutions, office buildings and residential undertakings of such size as specified in the NBFC Rules 3. Furniture of furnishing of any type, provided the NBFC may lease hard furniture excluding carpets and curtains up to 5% of its lease portfolio
4. Fix the period of lease for less than 3 years in the case of any finance lease agreement except in case of computers and other IT accessories. Some other institutions, most notably commercial banks, are also carrying leasing business but they dont need to get any license under NBFC Rules as they are carrying this under their respective regulations.
Discounting Services
Discounting service although not defined in the NBFC Rules but generally involves discounting of invoices and bills of exchange of different parties. This is actually a form of short term finance that an NBFC, if licensed, could provide to its clients. When an NBFC discounts invoices, it releases the amount of invoice to the client after deducting its discount. On the due date, the NBFC collects the amount of invoice directly from the relevant customer. Discounting service may be extended to provide wider factoring services. Any enterprise could thus outsource its sales ledger and recovery function to such NBFC. In Pakistan discounting services are usually rendered by commercial banks under the guidance of SBP in the form of PRUDENTIAL REGULATIONS.
Housing Finance Services

Housing Finance Services means financial services related to development and construction of residential and commercial properties. We may compare its role with House Building Finance Corporation, although it is a DFI rather an NBFC. An NBFC licensed by the Commission to undertake such services may undertake the following activities: a. Provide long term finance for the purpose of constructing, purchasing or renovating any property b. Lease and rent on hire purchase basis buildings for residential and commercial purposes c. Establish and manage housing schemes without engaging in real estate business d. Carry out surveys and valuations of land the properties e. Manage public or private sector projects in the housing and urban development sector f. Financing against existing property by way of mortgage
May 15, 2008
Prudential Regulations Regarding NBFCs

Prudential regulations are issued by SBPs Banking Policy and Regulation Department to regulate the activities of corporate and commercial banks. Since banks are important constituents of the financial markets same are the NBFCs so some prudential regulations also apply on the NBFCs or they are indirectly connected to NBFCs. Some of those are summarized as below: According To Prudential Regulations an NBFC Means: A Non-Banking Finance Company and includes a Modaraba, Leasing Company, Housing Finance Company, Investment Bank, Discount House, Asset Management Company and a Venture Capital Company.
Status of Securities Issued By NBFC

NIT Units, certificates of mutual funds, Certificates of Investment (COIs) issued by DFIs / NBFCs rated at least A by a credit rating agency on the approved panel of SBP are considered as liquid asset for banking companies.
Unsecured / Clean Financing Facility to an NBFC by A Bank

It is stated in the prudential regulations (R4) that Banks / DFIs shall not provide unsecured / clean financing facility in any form of a sum exceeding Rs 500,000/- (Rupees five hundred thousand only) to any one person. Financing facilities granted without securities including those granted against personal guarantees shall be deemed as clean for the purpose of this regulation. However, this limit of 500,000 for the purpose of providing unsecured clean financing facility is relaxed in case Banks are investing their funds in COIs OR inter bank placements with NBFCs that are rated A+, A or A- for long-term rating and at least A2 for short-term rating or equivalent by a credit rating agency on the approved panel of the State Bank of Pakistan or Standard & Poors, Moodys and Fitch-Ibca.
Limit on Total Exposure (Fund-Based And / Or Non-Fund Based) on an NBFC

May 15, 2008
It is stated in the prudential regulations that total exposure (fund-based and / or non-fund based) availed by any borrower from any financial institution shall not exceed 10 times of borrowers equity subject to the condition that the fund based exposure does not exceed 4 times of its equity. But In case of NBFCs, the total exposure (i.e. fund based and / or non-fund based) availed by any NBFC from financial institutions shall not exceed 10 times of its equity,
without the restriction of fund based exposure to be 4 times as in case of other types of borrowers.
Assuming Obligations on Behalf of NBFC

Regulation R9 states that Banks / DFIs shall not issue any guarantee or letter of comfort nor assume any obligation in respect of deposits, sale of investment certificates, issue of commercial papers, or BORROWINGS OF ANY NBFC. However, banks can underwrite the TFCs, commercial papers or other debt instruments issued by NBFCs. Moreover, banks can also give guarantee on behalf of an NBFC and in favor of multilateral agencies for providing credit to NBFCs. NBFC which is rated at least A or equivalent by a credit rating agency on the approved panel of State Bank of Pakistan can issue guarantee in favor of a bank to the extent of 2.5 times of capital of the NBFC.
Repealed Laws
By the introduction of NBFC Establishment & Registration Rules, 2003, following enactments have been repealed (canceled):

Venture Capital Companies and Venture Capital Funds Rules, 2001 The Leasing Companies (Establishment & Regulation) Rules, 2000 Asset Management Companies Rules, 1995 Investment Companies and Investment Advisor Rules, 1971
Every company, already in existence before the issue of such rules, which is engaged in one or more forms of NBFC business shall apply in writing to the Commission for grant of a new license along with a non-refundable processing fee of rupees fifty thousand (Rs.50,000). Provided that till such time that a new license is issued, the existing licenses or registrations shall be deemed to be valid for the purposes of these rules unless the company fails to apply for license as specified in Rule or the Commission declines to grant such license for reasons to be recorded in writing.
May 15, 2008
List of non-bank financial institutions

A. Development Finance Institutions (DFIs)
1. 2. 3. 4. 5. 6. 7. 8. Equity Participation Fund Investment Corporation of Pakistan National Investment Trust Ltd. Pakistan Kuwait Investment Company (Pvt) Ltd. Pakistan Industrial Credit & Investment Corporation Ltd. Pak-Lybia Holding Co. (Pvt) Ltd. Saudi Pak Industrial and Agricultural Investment Co.(Pvt) Ltd. Pak Oman Investment Co.Pvt.Ltd 22. 23. 24. 25. 26. 27. 28. Saudi Pak Leasing Company Ltd. Security Leasing Corporation Ltd. Sigma Leasing Corporation Ltd. SME Leasing Limited Trust Leasing Corporation Ltd. Union Leasing Ltd. Universal Leasing Corporation Ltd.
C. Investment banks
1. Asset Investment Bank Ltd. 2. Atlas Investment Bank Ltd. 3. Crescent Slandered Investment Bank Ltd. 4. Escorts Investment Bank Ltd. 5. Fidelity Investment Bank Ltd. 6. First International Investment Bank Ltd. 7. Islamic Investment Bank Ltd. 8. Jahangir Siddiqui Investment Bank Ltd. 9. Orix Investment Bank Pakistan Ltd. 10. Prudential Investment Bank Ltd. 11. Security Investment Bank Ltd. 12. Trust Investment Bank Ltd.
9.
B. Leasing Companies
1. Asian Leasing Corporation Ltd., 2. Askari Leasing Company Ltd. 3. Capital Assets Leasing Corporation Ltd. 4. Crescent Leasing Corporation Ltd. 5. Dawood Leasing Company Ltd. 6. English Leasing Ltd. 7. First Leasing Corporation Ltd. 8. Grays Leasing Ltd. 9. Ibrahim Leasing Ltd. 10. Inter Asia Leasing Company Ltd. 11. International Multi Leasing Corporation Ltd. 12. Lease Pak Ltd. 13. National Assets Leasing Corporation Ltd. 14. Natover Lease & Refinance Ltd. Ltd. 15. Network Leasing Corporation Ltd. 16. Orix Leasing Pakistan Ltd. 17. Pacific Leasing Company Ltd. 18. Pak-Apex Leasing Company Ltd. 19. Pak-Gulf Leasing Company Ltd. 20. Pakistan Industrial & Commercial Leasing Ltd. 21. Paramount Leasing Company HAILEY COLLEGE OF BANKING AND FINANCE
D. Modaraba companies
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. Al-Zamin Leasing Modaraba B.F.Modaraba B.R.R.International Modaraba Financial Link Modaraba First Allied Bank Modaraba First Alnoor Modaraba First Constellation Modaraba First Elite Capital Modaraba First Equity Modaraba First Fidelity Leasing Modaraba First General Leasing Modaraba First Grindlays Modaraba First Habib Bank Modaraba First Habib Modaraba First Hajveri Modaraba First I.B.L.Modaraba First Imrooz Modaraba First Interfund Modaraba
May 15, 2008
19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29.
First Islamic Modaraba First Mehran Modaraba First Pak Modaraba First Paramount Modaraba First Prudential Modaraba First Punjab Modaraba First Tri-Star Modaraba First UDL Modaraba Guardian Leasing Modaraba Industrial Capital Modaraba Long Term Venture Capital Modaraba 30. Modaraba Al-Mali
E. Discount & guarantee houses

1. First Credit & Discount Corporation (Pvt) Ltd. 2. First Prudential Discount & Guarantee 3. House Ltd.
F. House finance companies

1. Citibank Housing Finance Company Ltd. 2. House Building Finance Corporation 3. International Housing Finance Ltd.
31. Modaraba Al-Tijarah

32. Second Tri-Star Modaraba 33. Trust Modaraba 34. Unity Modaraba
G. Venture capital companies

1. Pakistan Venture Capital Ltd.Appendix IV 2. National Discounting Services Ltd.
May 15, 2008
ANNEXURE
FORM-I [see rule 4(1)] APPLICATION FOR PERMISSION TO FORM A NON BANKING FINANCE COMPANY Dated:_______________ To The Securities and Exchange Commission of Pakistan, Islamabad. Dear Sir, We hereby apply for grant of permission under rule 4 of the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003, to form a Non-Banking Finance Company under the name and style of * ---------------------------------------------------------------------------------------- The information and documents as required in the Annexure to this form duly verified and signed by all promoters and proposed directors along with five spare copies of this application and an affidavit by them as to the correctness of the details, is submitted. We undertake to keep this information upto date by communicating changes or modifications therein within fourteen days of such changes or modifications. A receipt of rupees one hundred thousand (Rs. 100,000/-) being the processing fee, deposited in-------------on ------------------------is enclosed. Yours faithfully, -----------------------Verification by Oath Commissioner. Name of the company ANNEXURE TO FORM-I [see rule 4] INFORMATION TO BE SUPPLIED FOR OBTAINING PERMISSION TO FORM A NON BANKING FINANCE COMPANY AND SUBSEQUENT CHANGE IN DIRECTORSHIP AND CHIEF EXECUTIVE 1. Full name, former name if any, fathers or husbands name, nationality, residential and business address, national tax number, present occupation of each sponsor, proposed director, proposed chief executive and proposed chairman of the Board. (Institutional sponsors shall mention their names and addresses only instead of giving all these particulars of their nominee directors). 2. Names and addresses of companies, firms and other organizations of which the aforesaid sponsors, proposed chief executive and proposed chairman are or have been directors, partners or office holders during the last ten years. Copies of annual accounts of such companie s and firms for the last three years alongwith summary of their paid-up share capital, free reserves, profit after tax and dividend payment to be provided. 3. Financial standing, educational as well as professional qualifications and experience of persons mentioned in paragraph 1 above, supported by documentary evidence.
4. Percentage of capital, each sponsor proposes to contribute in the proposedcompany. 5. Feasibility report of the proposed company. 6. Evidence of payment of income tax and wealth tax by the sponsors in individual capacity as well as by the companies, firms, etc., wherein they are or have been directors during the preceding five years. 7. Net-worth certificate of each sponsor supported by a duly authenticated copy of the latest wealth statement filed with the taxation department. In the case of sponsors or directors residing in countries where filing of wealth statement is not the requirement of law, a certificate of personal net-worth and general reputation issued by a bank of international repute shall be acceptable. 8. Names of the bankers of the sponsors alongwith their account numbers. 9. Draft of the Memorandum and Articles of Association. 10. Affidavit from each person mentioned in paragraph 1 above, stating that(a) he has not been associated with any illegal banking business, deposit taking or financial dealings; (b) he and companies in which he is a director or major shareholder have no over-due loans or installments outstanding towards banks or other financial institutions; (c) neither he nor companies in which he is a director or major shareholder has defaulted in paying taxes as on the date of application; (d) he has not been sponsor, director or chief executive of a defaulting cooperative finance society or finance company; (e) he has never been convicted of fraud or breach of trust or of an offence involving moral turpitude or removed from service for misconduct; (f) he has neither been adjudged an insolvent nor has defaulted in making payments, to his creditors; and (g) his net-worth is not less than twice the amount to be subscribed by him personally (not applicable to a nominee director).
May 15, 2008
FORM-II [see rule 5(1)] APPLICATION FOR OBTAINING LICENCE TO UNDERTAKE OR CARRY OUT *_________________ AS NON BANKING FINANCE COMPANY Dated, the-------------To, The Securities and Exchange Commission of Pakistan, Islamabad. Dear Sir, We hereby apply for grant of licence under rule 5 of the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003, to undertake __________* as a Non-Banking Finance Company. 2. We hereby furnish the following information,__ (a) date of incorporation as a limited company; (b) authorised, subscribed and paid-up share capital of the company (sponsors' equity indicated separately); (c) names and addresses of directors and number of shares held by each of them; (d) directors' interest, direct or indirect, in any other company with details of such interest; (e) details of persons or group controlling the company including major shareholders with number and value of shares held; (f) names of holding, subsidiary and associated undertaking, if any; (g) details of qualified staff engaged; (h) reasons for selecting the proposed place of business with statistical data; and (i) additional facts in support of this application. 3. Certified copies of the memorandum and articles of association and certificate of incorporation are enclosed. 4. An affidavit as to the correctness of the above information by the chief executive and two directors is also furnished herewith. We undertake to keep this information upto date by communicating changes or modifications therein within fourteen days of such change or modifications. 5. A receipt of rupees one hundred thousand (Rs. 100,000/-) being the processing fee, deposited in __________ on ________ is enclosed. Yours faithfully, Signature----------------(To be signed by all the directors)
May 15, 2008
*Any one of the activities or functions as mentioned under section 282 (A) of the Companies Ordinance, 1984.
FORM -III [see rule 5(2)] SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN Islamabad, Dated, the __________ Registration No. _________ LICENCE TO CARRY OUT OR UNDERTAKE *_________AS NON-BANKING FINANCE COMPANY The Securities and Exchange Commission of Pakistan having considered the application for grant of licence under rule 5 of the Non-Banking Finance Company (Establishment and Regulation) Rules, 2003, by **_______________________________ and being satisfied that the said ** ________________________________________ is eligible for the licence, hereby grants, in exercise of the powers conferred by sub-rule (2) of rule 5 of the Non-Banking Finance Company (Establishment and Regulation) Rules, 2003, licence to **______________________________________ to undertake or carry out *__________ subject to the conditions stated herein below or as may be prescribed or imposed hereafter. Signature of the Officer *Any one of the activities or functions as mentioned under section 282 A of the Companies Ordinance, 1984 ** Name of the Company (Official Seal and Stamp)
May 15, 2008
FORM IV [see rule 5(4)] APPLICATION FOR RENEWAL OF LICENCE TO CARRY OUT *_______________ AS NON-BANKING FINANCE COMPANY Islamabad the ................... Securities and Exchange Commission of Pakistan, Government of Pakistan, Islamabad Dear Sir, We hereby apply for renewal of the licence to carry out *...............................of by **_____________ under rule 5 of the Non-Banking Finance Company (Establishment and Regulation) Rules, 2003, The licence issued or renewed earlier is due to expire on....................... Original receipt of challan evidencing payment of renewal fee of rupees twenty five thousand (Rs.25000/-) is enclosed. It is requested that the licence may be renewed w.e.f. ..................... for a period one year. Yours faithfully, Name and Signature of the Secretary or a director of the company. *Any one of the activities or functions as mentioned under section 282 A of the Companies Ordinance, 1984. ** Name of the company.
May 15, 2008
FORM V [see rule 5(5)] SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN LICENCE TO CARRY ON *_______________ AS NON-BANKING FINANCE COMPANY Islamabad, the ............ The Securities and Exchange Commission of Pakistan, having considered the application for renewal of licence to carry out *_________________submitted by **..............................under rule 5 of the NonBanking Finance Company (Establishment and Regulation) Rules, 2003, and being satisfied that it would be in the public interest so to do, in exercise of powers conferred by sub-rule 5 of rule 5 of the said rules, hereby renew the licence of**.......................... to carry out *___________ subject to the conditions stated herein below or as may be prescribed or imposed hereafter. ......................................... (Signature of the officer) * Any one of the activities or functions as mentioned under section 282 A of the Companies Ordinance, 1984. ** Name of the company.
May 15, 2008
FORM VI [see rule 26(2)] APPLICATION FORM FOR GRANT OF LICENCE AS A VENTURE CAPITAL FUND Securities and Exchange Commission of Pakistan, Government of Pakistan, Islamabad. Dear Sir, We hereby apply for grant of licence to*.................... under sub-rule 2 of rule 26 of the Non-Banking Finance Company (Establishment and Regulation) Rules, 2003. 2. Two copies of the memorandum and articles of association are enclosed. Necessary information required under rule 25 and 26 of the said rules has been annexed. We undertake to keep this information up-to-date at all times. 3. A receipt of rupees fifty thousand (Rs. 50,000/-) being the processing fee, deposited in _______ on __________ is enclosed. Yours faithfully, Name and Signature of the Secretary or a director of the venture capital fund ________________________ Name of the venture capital fund.
Annex to Form VI Information to be enclosed at the time of application for grant of licence. PART I Please provide information in respect of directors, chief executive and chairman: (1) Name, former Name (if any). (2) Father's name. (3) Nationality. (4) Residential address. (5) Business address. PART II
May 15, 2008
1. Whether the company has been incorporated as a public limited company under the Companies Ordinance, 1984.
Yes
No
2. If yes, whether copy of certificate of incorporation issued by Yes CRO and two copies of memorandum and article of association have been enclosed with the application.
No
3. Whether processing fee amounting to Rs. has been deposited in favour of the Securities and Exchange Commission of Pakistan in designated branch of the bank. 4. Feasibility report is enclosed.
Yes
No
Yes
No
May 15, 2008
FORM VII [see rule 26(3)] SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN LICENCE TO CARRY ON THE BUSINESS OF A VENTURE CAPITAL FUND Islamabad, the ................. The Securities and Exchange Commission of Pakistan, having considered the application for grant of licence and being satisfied that *...............................is eligible for grant of licence and that it would be in the public interest so to do, in exercise of the powers conferred by sub-rule 3 of rule 26 of the Non-Banking Finance Company (Establishment and Regulation) Rules, 2003, hereby grants licence to *...............................for a period of one year from.........to......... subject to the conditions stated herein below or as may be prescribed or imposed hereafter. ......................................... (Signature of the officer) ________________________ Name of the venture capital fund.
May 15, 2008
FORM VIII [see rule 28(1)] APPLICATION FOR RENEWAL OF LICENSE TO OPERATE AS VENTURE CAPITAL FUND Islamabad the ................... Securities and Exchange Commission of Pakistan, Government of Pakistan, Islamabad Dear Sir, We hereby apply for renewal of the licence of *............................... under sub-rule (1) of rule 28 of the Non-Banking Finance Company (Establishment and Regulation) Rules, 2003. 2. The licence issued and renewed earlier is due to expire on....................... 3. Original receipt of challan evidencing payment of renewal fee of rupees twenty five thousand (Rs. 25,000/-) is enclosed. 4. Schedule of investment clearly indicating project-wise investment made, results of investment as on the date of application and results expected in future is enclosed herewith. 5. It is requested that the licence may be renewed with effect from ..................... for a period of one year. Yours faithfully, Name and Signature of the Secretary or a director of the fund ________________________ Name of the venture capital fund.
May 15, 2008
FORM IX [see rule 28(2)] SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN LICENCE TO CARRY ON THE BUSINESS OF A VENTURE CAPITAL FUND Islamabad, the ............ The Securities and Exchange Commission of Pakistan, having considered the application for renewal of licence submitted by *..............................under sub-rule 1 of rule 30 of the Non-Banking Finance Company (Establishment and Regulation) Rules, 2003, and being satisfied that it would be in the public interest so to do, in exercise of powers conferred by sub-rule (2) of rule 28 of the said rules, hereby renew the licence of*.......................... subject to the conditions stated herein below or as may be prescribed or imposed hereafter. ......................................... (Signature of the officer) ________________________ Name of the venture capital fund.
May 15, 2008
FORM X [see rule 38] FORM OF APPLICATION FOR REGISTRATION AS AN INVESTMENT COMPANY Islamabad, the ____20__. To The Securities and Exchange Commission of Pakistan, Islamabad. Sir, We hereby apply for the registration of ........................... (name of investment company) under rule 40 of the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003. 2. Undertakings (in original) from the investment company and the investment adviser in terms of sub-rule (2) of rule 38 of the aforesaid rules and four copies of each of the following documents are enclosed, namely:(i) memorandum and articles of association; (ii) investment advisory contract; (iii) custodian agreement; and (iv) underwriting agreement. 3. We hereby undertake to take all steps necessary to have the securities issued by us listed on a stock exchange. 4. Necessary information required in the annex to this form is furnished. We undertake to keep the information up-to-date at all times. Yours faithfully, Signature of the Secretary or a director of the applicant company
Annex to form x 1. Name, address and telephone number of the Company 2. Date and place of incorporation 3. Names and addresses of directors, distinguishing between promoter directors and other directors 4. Whether any director has been convicted of fraud or breach of trust. 5. Whether any director has been adjudicated as insolvent or has suspended payment or has compounded with his creditors. 6. Names and addresses of officers and employees. 7. Whether any officer or employee has been convicted for fraud or breach of trust. 8. Whether any officer or employee has been adjudicated as insolvent or has suspended payment or has compounded with his creditors. 9. Names of the directors, officers and employees of the investment company and those of the investment adviser thereof whoare members of a stock exchange. 10. Directors interest, direct or indirect in any other investment company. .................................................... ................................................... ................................................... ................................................... ................................................... ................................................... ................................................... ................................................... ...................................................
May 15, 2008
11. Previous experience of the promoters and directors in the investment field. 12. The financial standing of the promoters and directors (Attach proof, if any). 13. (a) Authorised capital of the company. (b) Part of such capital proposed to be raised through public offer. 14. Name, address and telephone number of the investment adviser. 15. Name and address of the custodian. 16. Name and address of the underwriter. 17. Financial standing and resources of the underwriter.
................................................... ................................................... ................................................... ................................................... ................................................... ................................................... ...................................................
May 15, 2008
FORM XI [see rule 38(3)] CERTIFICATE OF REGISTRATION AS AN INVESTMENT COMPANY SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN Islamabad, the________20__. The Securities and Exchange Commission of Pakistan having considered the application for registration under sub-rule (1) of rule 38 of the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003, by.................................................(Name of the Investment Company) and being satisfied that the said.......................................................... ......................................(Name of the Investment Company) is eligible for registration and that it would be in the interest of the capital market so to do, hereby grants, in exercise of the powers conferred by sub-rule (3) of rule 38 of the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003, registration to................................................... ....................................(Name of the investment company) subject to the conditions stated herein below or as may be prescribed or imposed hereafter. 2. The draft agreement between............................................................. (Name of theinvestment company) and ................................................(Name of the investment Adviser) is approved subject to the following conditions:-3. The appointment of ...............................................................(Name of custodian) is hereby approved subject to the following conditions:- 4. The appointment of ............................................................... (Name of the investment adviser) is hereby approved subject to the following conditions:Signature of the officer.
May 15, 2008
FORM XII [see rule 41(2)] INFORMATION TO BE CONTAINED IN THE APPLICATION FOR AUTHORIZATION OF A CLOSED-END SCHEME Details of the closed-end scheme:1. Name of the closed-end scheme. 2. Structure of the closed-end scheme. 3. Subscription date and place. 4. Dealing; daily or weekly or other. 5. Investment objectives. Details of the parties to the closed-end scheme:6. The investment adviser: (a) Name. (b) Registered or business address. (c) Name of the ultimate holding company, if any. (d) Previous approval of the Commission to manage authorized closed-end, open-ended schemes and investment companies. If no, the resumes of the directors and most recent audited financial report. 7. The trustee: (a) Name. (b) Registered or business address. (c) Name of the ultimate holding company, if any. (d) Previous approval of the Commission as trustee of authorized closed-end and open-ended schemes. If no, names of the directors and most recent audited financial report. 8. For the trustee and investment adviser: (a) Which, if any, of these companies are connected persons? (b) Name anyone who holds appointments, as director or officer, with more than one of these companies. 9. Distribution company: (a) Name. (b) Registered or business address. (c) Name of ultimate holding company. 10. The auditor: (a) Name. (b) Registered or business address. 11. The principal broker:
May 15, 2008
(a) Name. (b) Registered or business address. (c) The approximate percentage of the closed-end scheme's transactions in value of securities carried out by the principal broker within the latest financial year of the closed-end scheme. (d) Whether the trustee, the directors of the closed-end scheme or the investment adviser is a connected person of the principal broker?
May 15, 2008
FORM XIII [see rule 67(2)] INFORMATION TO BE CONTAINED IN THE APPLICATION FOR AUTHORIZATION OF A UNIT TRUST SCHEME Details of the scheme :1. Name of the scheme. 2. Structure of the scheme. 3. Launch; date and place. 4. Dealing; daily or weekly or other. 5. Valuation of assets; daily or weekly or other. 6. Pricing policy. 7. Investment plans to be offered. For each Scheme :8 Fee structure: (i) Level of all charges payable by investor; and (ii) Level or basis of calculation of all charges payable by the scheme. Details of the parties to the scheme :9. The asset management company: (a) Name. (b) Registered or business address. (c) Name of the ultimate holding company, if any. (d) Previous approval of the Authority to manage authorized schemes. If no, the resumes of the directors and most recent audited financial report. 10. The trustee: (a) Name. (b) Registered or business address. (c) Name of the ultimate holding company, if any. (d) Previous approval of the Authority as trustee of authorized schemes. If no, names of the directors and most recent audited financial report. 11. For the trustee and asset management company: (a) Which, if any, of these companies are connected persons? (b) Name anyone who holds appointments, as director or officer, with more than one of these companies. 12. Distribution company: (a) Name. (b) Registered or business address. (c) Name of ultimate holding company. 13. The auditor: (a) Name. (b) Registered or business address.
May 15, 2008
14. The principal broker: (a) Name. (b) Registered or business address. (c) The approximate percentage of the scheme's transactions in value of securities carried out by the principal broker within the latest financial year of the scheme. (d) Whether the trustee, the directors of the scheme or the asset management company is a connected person of the principal broker? 15. Legal Adviser: (a) Name. (b) Registered or business address.
May 15, 2008

Non Bank Finance Companies 2

Încărcat de

Informații document

Descriere originală:

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Non Bank Finance Companies 2

Încărcat de

Drepturi de autor:

Formate disponibile

PRESENTED TO:

PROF: SHEIKH USMAN YOUSAF

NON-BANKING FINANCE COMPANIES

PRESENTED BY: M06MBA014 5/15/2008

2NON-BANKING FINANCE COMPANIES

Investment Finance Company (IFC)

Limits on Margin Loans by NBFC (IFC)

3NON-BANKING FINANCE COMPANIES

Open-End Fund Close-End Fund

Investment Companies & Investment Advisory Services

4NON-BANKING FINANCE COMPANIES

May 15, 2008

HAILEY COLLEGE OF BANKING AND FINANCE

5NON-BANKING FINANCE COMPANIES

Non-Banking Finance Companies

Difference between an NBFC & commercial bank

May 15, 2008

HAILEY COLLEGE OF BANKING AND FINANCE

6NON-BANKING FINANCE COMPANIES

Powers of the Commission in Regulating NBFCs

7NON-BANKING FINANCE COMPANIES

4. The Commission is empowered to remove any director, chief executive, chairman

company up to 3 years if board was found lacking fiduciary behavior.

Restrictions Imposed By SECP on NBFC for Ceiling of Fraud

May 15, 2008

Investment Finance Company (IFC)

8NON-BANKING FINANCE COMPANIES

An NBFC That Is Licensed By the Commission to Undertake:

May 15, 2008

Maturity Period of Certificate of Investment (COI) & Certificate Of Deposit (CD)

9NON-BANKING FINANCE COMPANIES

Application of Resources Raised Through COI or CD

May 15, 2008

HAILEY COLLEGE OF BANKING AND FINANCE

10NON-BANKING FINANCE COMPANIES

2. Handle payments and collections for clients.

Limits on the Total Investment in Equities

May 15, 2008

HAILEY COLLEGE OF BANKING AND FINANCE

11NON-BANKING FINANCE COMPANIES

LIMITS ON MARGIN LOANS BY NBFC

May 15, 2008

HAILEY COLLEGE OF BANKING AND FINANCE

12NON-BANKING FINANCE COMPANIES

Investment Companies & Investment Advisory Services

Types of Mutual Funds

Open Ended Mutual Funds

Closed Ended Mutual Funds

May 15, 2008

13NON-BANKING FINANCE COMPANIES

Close-end fund i. ii. iii. iv. v. vi. vii. viii.

May 15, 2008

HAILEY COLLEGE OF BANKING AND FINANCE

14NON-BANKING FINANCE COMPANIES

xii. xiii. xiv.

Investment Companies & Investment Advisory Services

May 15, 2008

HAILEY COLLEGE OF BANKING AND FINANCE

15NON-BANKING FINANCE COMPANIES

Close-Ended Scheme or Fund

May 15, 2008

HAILEY COLLEGE OF BANKING AND FINANCE