Lecture # 2

SECP

Insurance Division

Protection of the interests of insurance policy holders

It is based in Karachi

Regulates the insurance sector

Promotion of insurance industry on sound principles

It has 3 wings: (i). Life (ii). Non life (iii). Takaful

Support Functions

Human Resources and Training Department

Finance and Administration Department

Information Systems and Technology DepartmentLaw Division (Consisting of 3 wings): (1) Advisory Wing (2)Litigation Wing (3)Legislation Wing

Law Administered by the Commission

Various laws, statutes, Acts, ordinances, Rules and regulations

Some salient laws:

Substantial Acquisition of Voting Shares and Takeovers Ordinance 2002 Central Depositories Act 1997 Companies Ordinance 1984

Modaraba Companies and Modaraba Ordinance 1980

Rules and Regulations

NBFC Regulations Private Equity and Venture Capital Fund Regulations 2008

Takaful Rules 2005Commodity Exchange and Futures Contracts Rules 2005 Prudential Regulations for NBFC Single Member (Private Limited Companies) Rules Guidelines for Issue of Commercial Paper

Code of Corporate Governance Companies (Asset-Backed Securitization) Rules 1999Credit Rating Companies Rules

Incorporation of a Company (i)(1) Eight registration offices established by SECP at Islamabad, Karachi, Lahore, Peshawar, Faisalabad, Multan, Sukkur and Quetta for registration, monitoring, guidance & compliance of rules.(2) All concerned can inspect the records at these offices & receive certified compies of any document.

(3) Single member company(4) Private company (More than one member)

Continued on next slide.....

Incorporation of a Company (ii)(5) Prior approval is required before incorporation of the following types of companies:NameA banking company NBFC

Approving Ministry of FinanceState Bank of Pakistan SECP

Security service companyA corporate brokerage company A money exchange company An association not for profit ( Under S. 42 Companies Ordinance, 1984) A trade organization (Under S. 42 Companies Ordinance, 1984)

Interior DivisionStock Exchange State Bank of Pakistan SECP Ministry of Commerce

Requirements for Registration (i)I. Private Limited Company:(a) Availability of name (online = Rs. 200 / offline = Rs. 500) (b) Documentsi. ID Card/Passport ii. Memorandum and Articles of Association (4 copies)

iii. Declaration of compliance of pre-requisites (Form 1)iv. Notice of situation of registered office (Form 21) v. Particulars of first directors

vi. Paid challan of feevii.Authorization to a representativeContinued on next slide.....

Requirements for Registration (ii)(c) Additional requirements for a public company:i. List of persons consenting to act as director minimum 3 initial directors (Form 27)

ii. Consent of directors (Form 28)

(d) Additional requirements for a single member company in addition to a private limited company:i. Nominations of two persons to act in case of the death of the sponsor.

(e) Additional requirements for a security companyContinued on next slide.....

Requirements for Registration (iii)(f) Transfer of membership of single member company to a new member file with the registrar(g) Change in status of a single member company a special resolution change the articles election of one or more directors (Form 29 with the registrar) (h) Company becoming a single member company (i)Obtaining attested copies of Memorandum & Articles of Association pay fee

Continued on next slide.....

Requirements for Registration (iv)(j) Documents for an association not for profit:i. In case of trade body, a license from Ministry of Commerce

ii. Draft memorandum & articles of assoc.iii. List of promoters with biodata iv.List of companies where they hold offices v. Estimates of their annual income & association's expenditure vi.Work already done / to be done

Procedure for Online Submission

Log on to: https://eservices.secp.gov.pk/eservicesSign up or log onto an existing account

New users will receive an e-mail containing an activation link

Provide the relevant information User will receive response from SECP via e-mail.

Requirements after Incorporation (i)(1) Appointment of CEO (within 15 days) and 14 days after election(2) Appointment of first auditor within 60 days of incorporation and afterwards at AGM (3) Company secretary to be appointed within 15 days

(4) First directors appointed at the time of incorporation shall hold office till election of directors at first AGM who will hold office for 3 years (5) Appointments, changes in key office holders to be intimated to registrar within 14 daysContinued on next slide.....

Requirements after Incorporation (ii)(6) Change in registered office: within 28 days(7) First AGM within 18 moths from the date of incorporation and subsequent AGMs within 4 months of close of financial year (within 15 months of first AGM) (8) AGMs purpose, agenda (9)Annual return on form A (10) Right shares

Useful Information

Karachi Stock Exchange: kse.com.pk kse.net.pk Sample name of one member Company: ABC (smcpvt.) LimitedPublic Limited Company: Three initial directors Private Limited Company: Minimum two directors, shareholders up to 50Continued on next slide.....

Useful Information (contd.)

Two types of Private Limited Companies:i. With paid capital of Rs. 7.5 million or less. Annual accounts are not to be filed with SECP but have to be audited. AGM once a year. ii. With paid up capital of over Rs. 7.5 million. Audited annual accounts have to be filed with SECP. AGM once a year.

Quorum for Board Meetings in case of a public limited company: One third or 4 members which ever is higher Public limited company: Minimum number of directors is 7