Special Supplement: Commentary ON Recent Notifications of Securities and Exchange Commission of Pakistan

KHILJI
IN THE& CONAME OF ALLAH CORPORATE

ALMIGHTY, THE MOST MERCIFUL, BRIEFING
MOST 2020
BENEFICENT
Chartered Accountants
SPECIAL SUPPLEMENT
COMMENTARY
ON
RECENT
NOTIFICATIONS OF
SECURITIES AND
EXCHANGE
COMMISSION OF
PAKISTAN
Plot 2, Mezzanine Floor, Khumrial Plaza, I&T Center Street 22, Sector G-8/4, Islamabad.
Tel: +92 51 2253303-6, Fax +92 51 2253307, Email: sharif.khilji@khilji.net.pk,
Website: www.khilji.net.pk
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KHILJI & CO CORPORATE BRIEFING 2020
INTRODUCTION
Government of Pakistan continues its efforts to fully comply with the recommendations of FATF.
In this context, like other government authorities and regulators, Securities and Exchange
Commission of Pakistan (SECP) has issued various significant notifications and regulations
during last week of September 2020. These notifications were primarily aimed at fulfilling the
requirement of obtaining information about beneficial ownership of the various entities registered
with SECP. New Forms (41 to 45) have been introduced in The Companies (General Provisions
and Forms) Regulation 2108 to prescribed format in which such information has to be provided to
SECP.
We are pleased to present for information of our valued clients our commentary on the newly
issued notifications and regulations. The information provided in this document is based on our
understanding and should only be used in conjunction with professional opinion from tax/ legal
advisor and after checking the updated position of law. This document as a whole or its any part
should not be reproduced in any form without prior written approval from Khilji & Co. This
document is distributed free of cost to our clients only. We humbly request our readers to please
provide us the most valuable comments to make this more informative and useful.
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This issue covers the following SROs.
AMENDMENTS IN THE FOREIGN COMPANIES REGULATIONS, 2018
S.R.O. 926 (I)/2020 dated September 28, 2020
AMENDMENTS IN COMPANIES (INCORPORATION) REGULATIONS 2017
S.R.O. 927 (I)/2020 dated 28th September, 2020
AMENDMENTS IN LIMITED LIABILITY PARTNERSHIP ACT 2017
AMENDMENTS TO THE COMPANIES (GENERAL PROVISIONS AND FORMS)
REGULATIONS, 2018
OVERSIGHT REGULATIONS FOR SELF-REGULATORY BODIES OF
ACCOUNTANTS, 2020
SECP Vide S.R.O. 919 (I)/2020 dated September 28, 2020
AMENDMENTS TO THE COLLATERAL MANAGEMENT COMPANIES
REGULATIONS, 2019
SECP vide S. R. O. 915 (I)/2020 dated September 25, 2020
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AMENDMENTS IN THE FOREIGN COMPANIES

REGULATIONS, 2018
SECP vide S.R.O. 926 (I)/2020 dated September 28, 2020 made amendments in the Foreign
Companies Regulations, 2018 with respect to ultimate beneficial ownership information.
AMENDMENTS ARE AS FOLLOWS: -
Every Foreign Company is required to obtain and maintain following additional information of
member holding at least twenty-five percent of the shares, voting rights or controlling interest in
the foreign company on behalf of some other person, as “Record of Ultimate Beneficial Owners”.
a. Name of the member of the foreign company not having beneficial interest in the foreign
company.
b. Name of the natural person who is the ultimate beneficial owner of the foreign company.
c. Father’s name/Spouse’s Name.
d. NIC/NICOP/ Passport no. along-with date of issue.
e. Nationality
f. Country of origin
g. Usual residential address
h. Email address
Where member has indirect shareholding or control, following particulars of legal persons or
legal arrangement through whom shareholding, interest or control exercised in the chain of
ownership or control: -
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a. Name of the entity

b. Legal form (Company/ LLP/Partnership Firm/Trust/Any other body corporate (to be
specified))
c. Date of incorporation/ registration
d. Name of registration authority
e. Business Address
f. Country.
g. Email address.
h. Percentage of shareholding, control or interest of UBO in the legal person or legal
arrangement.
i. Percentage of shareholding, control or interest of legal person or legal arrangement in the
foreign company.
j. Identity of natural person who ultimately owns or controls the legal person or
arrangement.
“ULTIMATE BENEFICIAL OWNER” means a natural person who ultimately owns or

controls a foreign company, whether directly or indirectly, through at least 25% of shares or
voting rights or by exercising effective control in that company through other means. ‘Control
through other means’ may be exercised through a chain of ownership or through close relatives or
associates having significant influence or control over the finances or decisions of the foreign
company.
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AMENDMENTS IN COMPANIES (INCORPORATION)

REGULATIONS 2017
SECP vide S.R.O. 927 (I)/2020 dated 28th September, 2020 made amendments in Regulation-9 of
the Companies (Incorporation) Regulations 2017, authorizing concerned registrar to require /
obtain information from subscribers holding at least twenty-five percent of the shares, voting
rights or controlling interest in the proposed company on behalf of some other natural or legal
person, following additional particulars of ultimate beneficial owner(s), shall be obtained and
maintained: -
a. Name of the subscriber (natural or legal person)

b. Name of the natural person(s) who is/are the Ultimate Beneficial Owner (UBO) of
subscriber
c. Father’s name/Spouse’s Name of UBO
d. NIC/NICOP/ Passport no. of UBO along with date of issue
e. Nationality of UBO
f. Country of origin of UBO (in case of foreign national or dual national)
g. Usual residential address of UBO
h. Email address of UBO
i. Date in which the UBO status was acquired
In case of indirect shareholding, control or interest being exercised through intermediary

companies, entities or other legal persons or legal arrangements in the chain of ownership or
control through at least twenty-five percent of the shares, voting rights or controlling interest in
the proposed company, reasonable measures shall be taken to obtain the following particulars of
the ultimate beneficial owner of the legal persons or arrangements. If there is no natural person, it
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should obtain the identity of the relevant natural person who holds the position of senior
managing official:
Name Legal Date of Name of Busin Count Email Percentage Percentage Identity of
of form incorpor registerin ess ry addres of of Natural
entity (Comp ation/ g Addre s shareholdin shareholdin Person
any/LL registrati authority ss g, control or g, control or who
P/ on interest of interest of Ultimately
Partner UBO in the legal person owns or
ship legal person or legal controls
Firm/Tr or legal arrangement the legal
ust/ arrangement in the person or
Any Company arrangeme
other nt
body
corpora
te (to
be
specifie
d))
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
Ultimate Beneficial Owner is defined as: -

“ultimate beneficial owner” means a natural person who ultimately owns or controls a company,
whether directly or indirectly, through at least twenty-five percent shares or voting rights or by
exercising effective control in that company through other means. Control through other means
may be exercised through a chain of ownership or through close relatives or associates having
significant influence or control over the finances or decisions of the company.
Name of other companies where directorship is held is required to be disclosed in the Company
Incorporation Application.
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AMENDMENTS IN LIMITED LIABILITY PARTNERSHIP ACT

2017
SECP vide SRO No. S.R.O. 925 (I)/2020 dated September 28, 2020 made amendments in in
Limited Liability Partnership Act 2017 with respect maintenance of “Register of Ultimate
Beneficial Owners” by the LLP. Said amendments require every LLP to comply with following
actions: -
 Every LLP is required to issue Notice to the Partner or Representative of Legal Partner
who shares 1/4th of the Net Profit / Loss of Partnership within three months from the
September 28, 2020, to obtain information about its ultimate beneficial owners, as per
LLP Form IX.
 Person who receive notice as explained above shall submit declaration, as per LLP Form
X, within fourteen days of the notice and any person on becoming a new Partner shall
submit declaration, as per LLP Form X, to LLP within fourteen days from the date his
name is entered in the Register of Partners.
 In-case of change in particulars about ultimate beneficial owners or change in ownership

in partnership shall submit declaration, LLP Form XI, stating change and other particulars.
 LLP receiving declarations as required above, shall submit a declaration, LLP Form XII,
to the concerned registrar stating compliance of above along-with information about
Partner, Designated Partners or Officer Authorized to provide information as required by
the concerned authorities.
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 “ultimate beneficial owner” means a natural person who ultimately and effectively owns
or controls a limited liability partnership through direct or indirect rights or who shares
at least one fourth of the net profits and losses of the partnership.
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AMENDMENTS TO THE COMPANIES (GENERAL

PROVISIONS AND FORMS) REGULATIONS, 2018
SECP vide S.R.O. 928 (I)/2020 dated September 28, 2020 made following amendments in the
Companies (General Provisions and Forms) Regulations 2018:
1 – Additions of New Forms as list below: -
Form 40 Public notice to holders of securities of bearer nature issued by a company

Under Section 60A and Regulation 16A (1)
Form 41 Register containing particulars of holders of securities of bearer nature and
particulars of such securities surrendered or cancelled
Under Section 60A and Regulation 16A (4) and (6)
Form 42 Notice to members for providing particulars of ultimate beneficial owners
Under Section 123A (1) and Regulation 19A (1)
Form 43 Declaration by member about ultimate beneficial owners
Form 44 Declaration by member about change of ultimate beneficial owners or particulars
thereof
Form 45 Declaration of compliance with the provisions of section 123A of the Companies
Act, 2017
2 – New Regulation No. 16A, after Regulations No. 16 is added, detailing Procedure for
Registration or Cancellation of Securities of Bearer Nature. Procedure is as follows: -
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 Where a company has issued any equity or debt security of a bearer nature, by whatever
name called, within three months of coming into force of Section 60A of the Companies
Act 2017, shall publish a Notice as per Form 40, in at least one daily English and Urdu
language national newspaper having wide circulation in the province in which the
registered office of the company is situated, requiring the holder(s) to surrender such
securities to the company for their registration in the name of the holder(s).
 In reply to the notice, the holder of any security of a bearer nature shall, within three
months of the publication of such notice, surrender the same to the company for its
registration.
 Where any security of a bearer nature is surrendered for registration, the company after
making such enquiry as deemed appropriate, shall enter the name of the holder in the
register of members or the register of debenture holders, as the case may be, in respect of
the securities represented by the instrument in accordance with the terms of issue thereof.
 Where the holder of any security of a bearer nature fails to surrender the same to the
company within the period specified hereinabove, the company shall, not later than three
months from the deadline for surrender of such securities, apply to the court for an order
for cancellation of the security with effect from the date of the order, pursuant to the
provisions of Section 89 of the Companies Act 2017, and shall also publish a notice in at
least one daily English and Urdu language national newspaper having wide circulation in
the province in which the registered office of the company is situated, within fourteen
days of such application, of the fact that an application has been made to the court under
this provision.
 Any security of a bearer nature, which has been surrendered pursuant to sub-regulation (3)
and registered or cancelled by the company, shall be duly accounted for in the next annual
return to be filed by the company.
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 A company which has issued securities of a bearer nature prior to the coming into force of
this provision shall prepare and maintain a register of the number of such securities, as per
Form 41, containing particulars of holders of such securities, the date of their issue,
surrender and cancellation, if any, under sub-regulation (2) or sub-regulation (4).
3 – Register of Shareholder / Debenture Holders shall contain following additional information: -

 Name of the person on whose behalf shares or debentures have been held; and
 Number of shares or percentage of voting rights or controlling interest in the company
held on behalf of a person not himself being a member or debenture holder of the
company.
4 – Regulation No. 19A added after Regulation 19, titled as “Additional particulars of Ultimate
Beneficial Owners”.
 Every Company is required to Maintain a Register of Ultimate Beneficial Ownership and

shall be submitted along-with Annual Return to the Registrar as Per Form 45. In-case of
Listed Company
 Procedure to obtain information and Maintain Register of Ultimate Beneficial Ownership
is as follows: -
o A company shall, within three months of coming into force of section 123A of the
Act, shall issue of Notice, as per Form 42, from every member or to the
representative of every legal person or legal arrangement, who/which holds at least
twenty-five percent of shares or voting rights in the company.
o On receipt of Notice as per Form 42, a declaration to the company as per Form 43,
within fourteen days of the notice is required to be submitted with the Company.
o Information as per Form 43 shall be submitted with the Company by the person
who becomes member subsequently to the enforcement of Section 123A shall, and
Information as per Form 44 shall be submitted with Company in-case of change in
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particulars of ultimate beneficial owner or his ownership of the company, within a

period of fourteen days from the date of any change.
o Where a declaration is made to a company under sub-regulation (2) or sub-
regulation (3), the company shall make a note of such declaration in a register of
ultimate beneficial owners to be maintained as per format defined.
 Company maintaining Register as explained above, shall made declaration to the Registrar
as per Form 45 and in-case of listed company shall be filled to the Commission.
 The board of directors of every company required to maintain a register of ultimate

beneficial owners shall authorize its chief executive officer or one of its directors or
officers to provide the information required under this regulation to the registrar for
verification purposes or to the other authorized authorities.
 “ultimate beneficial owner” means a natural person who ultimately owns or controls a
company, whether directly or indirectly, through at least twenty-five percent shares or
voting rights or by exercising effective control in that company through other means.
‘Control through other means’ may be exercised through a chain of ownership or through
close relatives or associates having significant influence or control over the finances or
decisions of the company.
5 – Following circulars shall stand deleted: -

 Circular No. 16 of 2018 dated August 29, 2018; and
 Circular No. 20 of 2018 dated November 1, 2018.
6 – Changes related to disclosure about Ultimate Beneficial Ownership and Nomination of

Director on behalf interest holders in Form A & 29 are made.
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OVERSIGHT REGULATIONS FOR SELF-REGULATORY

BODIES OF ACCOUNTANTS, 2020
SECP Vide S.R.O. 919 (I)/2020 dated September 28, 2020 issued “Oversight Regulations for
Self-Regulatory Bodies of Accountants, 2020”. Regulations are made in exercise of the powers
conferred by Section 6C of the Anti-Money Laundering Act 2010 (VII of 2010) (“the AML
Act”).
These regulations are effective with immediate effect. Important Definitions are as follows: -
Self-Regulatory Bodies (SRB) means followings Institutes: -

 Institute of Chartered Accountants of Pakistan (ICAP)
 Institute of Cost and Management Accountants of Pakistan (ICMAP)
Oversight Body means “Securities and Exchange Commission of Pakistan”.
“Member in Practice”: – means a member of the Institute having certificate of practice and:
i) Practicing as a "Chartered Accountant" individually (i.e. as a sole-proprietor) or in
partnership with chartered accountants.
ii) Practicing as a "Management Consultant".
“Reporting Entity”: - means Member(s) in Practice when they conduct any activity as
specified in AMLA in sections (2) (xii) (c) and/or (d).
These Regulations Comprise of following Chapters in addition to Preliminary: -
1. Duties of Self-Regulatory Body (SRB)

2. Functions of Oversight Body
Duties of Self-Regulatory Body (SRB)

This chapters require SRB to introduce and implement “Risk Based Approach”: -
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 to identify, assess and understand potential risks related to ML/TF and perform & act as
Supervisory Role and introduce regulations related to following: -
1. Risk assessment, mitigation and applications of a risk- based approach
2. Customer due diligence requirements; including but not limited to:
a. Requirements to identify and verify customers, beneficial owners
b. Requirements to conduct ongoing monitoring
c. Requirements to apply enhanced customer due diligence measures, including
with respect to politically exposed persons
3. Internal controls requirements
4. Training and capacity building requirements
5. Duty to co-operate with competent authorities
6. Targeted financial sanction (TFS) requirements
7. Risk assessment and mitigating requirement for new products, practices and
technologies
8. Requirements on reliance on third parties
9. Record-keeping requirements;
10. Countermeasures requirements;
11. Any other item as notified in the Act
 Apply suitable market entry controls to ensure that it does not professionally accredit
accountants that are criminals or acting as an associate of criminal, or whose beneficial owner
is a criminal or criminal associate.
 Provide adequate resources with the appropriate qualifications, integrity and professional
skills to carry out the supervisory, enforcement and outreach functions.
 Appoint a person to monitor and manage the its compliance with its duties under the Act and
Regulations made thereunder, who shall cooperate with authorities under subsection (5) and
ensure that the SRB responds to any request from any AML/CFT regulatory authority about
any reporting entity;
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 Keep and maintain a record in writing of the actions it has taken in the course of performing
its functions;
 Monitor and supervise compliance with the requirements of the regulations set out in
paragraph(a) including ensuring that reporting entities have adequate policies, controls and
procedures to implement those requirements in line with the ML/TF risks;
 Apply effective, proportionate and dissuasive sanctions to its reporting entities in accordance
with section 6A(2)(h) of the AML Act and the Rules regulating AML/CFT Sanctions 2020
issued under the AML Act; and
 Establish and maintain policies, controls and procedures to mitigate and manage effectively
the risks of money laundering and terrorist financing identified in risk assessments undertaken
by the reporting entity.
In exercising its supervisory functions under subsection (2), the SRB must take account of any
guidelines issued by its relevant AML/CFT regulatory authority, the FMU, Ministry of Foreign
Affairs (MOFA), Ministry of Interior (MOI) and NACTA.
Action Points for SRB are as follows: -

 Every SRB must, pursuant to section 7(2) of the AML Act, immediately report Suspicious
Transaction Report (STR) to the FMU that it encounters during the normal course of its
duties or functions and a report is not to be taken to breach any restriction, however
imposed, on the disclosure of information.
 SRB’s function under section 6A(2) of the AML Act shall be exercised independently of
any of its other functions and sensitive information relating to this shall be handled with
the confidentiality, in accordance with any relevant laws.
 Each SRB shall fully and rapidly respond to any request from any authority, for
information about any regulated person it supervises in relation to the implementation of
the Act and any rules, regulations, directive and guidelines issued thereunder. Further, Co-
operation may include the sharing of information which the SRB is not prevented from
disclosing.
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 Each SRB shall conduct ongoing outreach to reporting entities to promote a clear
understanding of their AML/CFT and TFS obligations and ML/TF risks.
Annual Reporting: -
 Each SRB must report annually to the oversight body, regarding—
 Compliance with this regulation.
 The number of reporting entities who are individuals, and the number of reporting entities
who carry out activities as specified in AMLA in sections (2) (xii) (c) and/or (d).
 The number of applications for membership which the SRB has received, rejected, and
accepted.
 The services provided by its reporting entities.
 The risk ratings of REs subject to the supervision of the SRB—
 The number, amount and type of sanctions it has imposed in relation to contraventions of
relevant section(s) of SRB Regulations on its supervised reporting entities, including the
reasons for deciding not to take disciplinary action in certain cases
 Any other relevant information that upon request that the Oversight Body needs to
perform its functions.
Functions of Oversight Body: —

Functions of Oversight Body are as follows: -
 The Oversight Body shall approve any regulations issued under section 3(2)(a) of this
regulation prior to those regulations coming into force.
 The oversight body may require any information provided under this regulation to be
provided in such form as it may reasonably require. Where the oversight body requires
information to be provided or documents to be produced, the notice must set out the
reasons why the authority requires the information to be provided or the documents
produced, unless the SRB is not permitted to disclose this information.
 The Oversight Body shall monitor the SRB’s compliance with its powers and functions in
accordance of section 6A(2) of the Act and this regulation.
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 The Oversight Body has the authority to order an examination or investigation into the
SRB’s activities as set out in this regulation and can appoint a skilled Person to investigate
the matters.
 The Oversight Body can impose charges on SRB for expenses incurred by the Oversight
Body in relation to an appointment of skilled person in paragraph (3).
Penalty:
Any SRB who contravenes or fails to comply with any provision of these regulations shall be
liable to a sanction in accordance with the A ML/CFT Sanctions Rules, 2020 issued under the A
ML Act and imposed by the Oversight Body according to sub-section (c) of section 6C of the
AML Act.
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AMENDMENTS TO THE COLLATERAL MANAGEMENT

COMPANIES REGULATIONS, 2019
SECP vide S. R. O. 915 (I)/2020 dated September 25, 2020 made amendments in the Collateral
Management Companies Regulations, 2019. Amendments are discussed hereunder: -
Amendments in Definitions
“Depositor of Produce” now covers “the legal heirs, assignees, and any other successor-in-interest
of such a person who delivers Produce to the Warehouse Operator for storage or transfer of
ownership”, previously it was restricted to the person who deliver produce to the warehouse
operator for storage or transfer of ownership.
In definition of "Electronic Warehouse Receipt" or "EWR" the word “centralized” is deleted and
CMC is replaced by accredited Warehouse.
Definition of “Eligible Pledgee” deleted.
Definition of “Physical Warehouse Receipt” is substituted by new definition of “Goods Receiving

Note” and “Goods Receiving Note” or “GRN” means a non-transferrable and non-assignable note
issued by a Warehouse Operator, evidencing the receipt of Produce from a Depositor.”
New Definition of “Holder” is added that means “a person to whom a Warehouse Receipt has
been assigned, sold, pledged or otherwise transferred by the Depositor of Produce or any
subsequent Holder.”
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Definition of “Warehouse” is now read as “Warehouse” means any premises, accredited by the
CMC, to be used for the custody of Produce deposited by a Depositor of Produce.”
Amendments in Regulation No. 6 - Duties of a Collateral Management Company: -
Substitutions: -
Following new Duties of a Collateral Management Company “CMC” are added in Regulations 6,
Sub-Regulation (1): -
 Comply with the Listed Companies (Code of Corporate Governance) Regulations, 2019 at
all times.
 develop, implement, and administer an Electronic Warehouse Receipts System enabling
Warehouse Operators to issue Electronic Warehouse Receipts which are assignable and
transferable in a manner consistent with applicable laws concerning documents of title
and electronic documents.
 specify the qualifications, code of conduct and practical training for Warehouse
Operators, inspectors and Warehouse specialized staff and the same may be specified in
the Standard Operating Procedures prepared by the CMC.
 promote professional organizations connected with warehousing and related logistical
businesses.
 determine the rate of, and levy, of fees and other charges assessed to Warehouses by the
CMC for carrying out the provisions of this Act.
 call for information from, undertaking inspection of, conducting inquiries and
investigation including audit of Warehouses.
 specify minimum levels of insurance coverage, and the compulsory terms which must be
provided for in policies of insurance by a Warehouse Operator.
 maintain records and documents, both in physical and electronic form, in respect of
accredited Warehouses.
 provide stock audit, evaluation, and verification services.
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 provide warehousing, i.e. provision of quality storage and preservation services for a
range of agricultural commodities,
Provided that a CMC shall not own a warehouse without prior written approval of the
Commission, subject to such terms and conditions as it may deem fit.
 carry out and perform such other functions as are conferred or imposed on it by the
Commission, or any applicable law.
New Regulations inserted:
 New Regulations No. 6(2) is added:
This make CMC liable for the duties set out in Regulation 6(1) and duties shall be
performed as provided in these Regulations, Standard Operating Procedures,
Warehousing Guidelines or provided in any agreement by the CMC in pursuance of its
business with any party.
 New Regulation No. 6A added and titled as “Collateral Management Company’s Power
to Inspect”:
The CMC shall inspect, and examine accredited Warehouses and Warehouse Operators
for compliance with the applicable laws, these Regulations and the Standard Operating
Procedures, pursuant to undertakings given by accredited Warehouses and Operators
given as a condition of accreditation.
For purposes of implementing sub-regulation (1) above, the CMC may call for
information from, undertake inspection of (itself or through a third-party inspector
answerable to it), conduct an inquiry, or audit, any and all Warehouses accredited by it,
as well as their Warehouse Operators.
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Amendment in Regulation No. 9 – Permitted Disclosures:
Under Permitted Disclosures, CMC may share information to auditors, chartered accountants, or
legal consultants of the CMC in order to enable them to discharge their duties. Previously it was
only limited to Auditor of CMC.
Amendment in Regulation No. 11 – Accreditation of Warehouse:
Previously Conditions for Accreditation of Warehouses were conclusive to the conditions as

defined in Regulations No. 11(1) and now set to open by adding words that “and such other
conditions as may be notified in the Standard Operating Procedures.”
Standard Operating Procedures means “Standard Operating Procedures and Warehousing

Guidelines (which shall include as annexures, templates for the warehouse accreditation
agreement, EWR system user agreement, text of EWR and GRN, warehouse storage agreement,
and the agreement between the CMC and futures exchange) prepared by CMC in accordance with
the applicable laws and as much as possible meet the best practices for the accreditation,
management and inspection of warehouses and have the same approved by the Commission and
approval of the Commission would only be to the extent of ascertaining consistency across the
industry.”
Where warehouses legally or beneficially owned by a CMC shall be inspected by third party
examiners appointed by the CMC that has accredited such Warehouse(s) and such arrangement
will be notified to and approved in writing by the Commission.”
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Substitutions in Regulations No. 11

Clause (j) is substituted as follows: -
“Warehouse is comprehensively insured in accordance with the minimum terms of coverage for
incidents including natural disaster, fire, theft, flood, burglary, fidelity and misappropriation, and
special perils covering riots, strikes and terrorism and compulsory terms to be included in any
policies or bonds of insurance for coverage of a Warehouse and the stored Produce, as stipulated
by the CMC or as may be provided in the Standard Operating Procedures and Warehousing
Guidelines”.
Clause (m) is substituted as follows: -

“Warehouse Operator has submitted an affidavit, and such other indemnities, consents, and
waivers, as may be stipulated in the Standard Operating Procedures and which inter alia,
stipulate that he is responsible to the Depositor of Produce and any Holder for ensuring
maintenance of quantity, weight and quality of Produce that is covered by outstanding Warehouse
Receipts as required by the Standard Operating Procedures and Warehousing Guidelines;”
Clause (n) is substituted as follows: -

“Warehouse is electronically connected with the CMC and can be connected with the Futures
Exchange as required by the Standard Operating Procedures and Warehousing Guidelines and
accredited warehouse staff have been trained to input data and otherwise manage the EWR
issuance and reporting procedures.”
Amendments in Regulation No. 12 - Cancellation of Certificate of Accreditation
Previously cancellation of Certificate of Accreditation was only limited to the Compliance of

Regulations 11 conditions and now extended to the Compliance of Standard Operating
Procedures and Warehousing Guidelines as defined by CMC.
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Cancellation shall be enforced subject to following conditions: -

detailed written order, after giving the Warehouse Operator an opportunity of being heard
shall be issued to the Warehouse Operator, and CMC shall ensure following: -
 that protective orders from a court of law for purposes of protecting the Produce
stored at the Warehouse has been obtained; and
 that the Depositor of Produce or Holder of outstanding Warehouse Receipts has been
consulted to ensure that Produce stored in the relevant warehouse has either been
transferred to another accredited Warehouse, or released to the Depositor of
Produce or the current Holder of outstanding Warehouse Receipt(s).”
Upon issuance of Cancellation Order CMC shall within five working days thereof, notify
the Commission, the Futures Exchange, and any known Holders of its decision to cancel
the concerned Warehouse’s accreditation, along with the grounds thereof, and provide a
public notice of the same on its website and in at least two daily newspapers which are
widely circulated and also read in the area.
New Regulation No. 12A, titled “Instructions to Warehouses by the CMC” is added in
Regulations: -
In the course of proceedings initiated for cancellation of accreditation of Warehouse, or if

the CMC becomes aware of information on the basis of which it would be prudent to take
steps to protect the interests of Depositors of produce, Holders or other interested third-
parties, pursuant to the written undertakings given by the Warehouse Operator at the time
of accreditation or subsequently, it may issue instructions to a Warehouse or Warehouse
Operator accredited by it for, inter alia, any of the following matters:-
 the release of any and all Produce to a Depositor or current Holder, or any other person
having a legal interest therein, or instructions to prevent or withhold the release of any
Produce, the title to which is under dispute;
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 the imposition of restrictions on any operational activities of the Warehouse, including

its right to issue EWRs, its access to the electronic warehouse receipts system, its right
to accept goods for warehousing, etc.
 the release and transfer of any or all Produce deposited at the Warehouse, to any other
location, as may be directed by the CMC;
 the suspension, cancellation, or imposition of terms, in respect of any one or all of the
EWRs issued by the Warehouse;
 the replacement or replenishment, as the case may be, of any or all defective or
deficient Produce stored at the Warehouse;
 carry out reasonable capital expenditures as may be necessary for maintenance,

refurbishment, renovation, or redesign of the Warehouse, as per the CMC’s
instructions;
 arranging for additional insurance coverage to be purchased on terms, for a limit, and
for the benefit of such persons, as may be stipulated by the CMC; and
 the carrying out of an audit, at the Warehouse’s own expense, through a reputable
chartered accountant’s firm selected by the CMC.
 Any instructions issued by the CMC pursuant to above, shall be duly notified to the
Commission no later than five working days thereafter.
24
In order to procure the compliance of the Warehouse Operator with instructions issued under the
foregoing provisions, the Standard Operating Procedures, the Warehousing Guidelines,
undertakings made by the Operator pursuant thereto, other applicable law, or in case it is
necessary to take urgent action to protect the interests of Depositors of Produce, Holders, or other
interested third-parties, the CMC shall apply to a Court of Law for equitable relief in the form of
an injunction or specific performance. Such action shall be without prejudice to any other legal
action which may be appropriate to take.
Further to above substitutions, amendments, deletions, amendments are made with respect to
“Warehousing Receipts”, “Standardization and Issuance of EWR”, “Maintenance of Record of
EWR”, “Restriction or Suspension of Business”, “Dissemination of information of Withdrawal of
Registration” etc., may be observed in the Notification.
BOARD OF PARTNERS
 Mr. Sharif Uddin Khilji, FCA
 Mr. Saeed Akhtar Chughtai, FCA, FPFA, FCILT - UK, LLM (Energy) - UK, MBA
(Oil) – UK –
 Mr. Zahid Mehmood, FCCA, FCA
 Mr. Muhammad Waheed Iqbal, FCA
 Mr. Rahat Gul, FCA
HEAD OFFICE
Plot 2, Mezzanine Floor, Khumrail Plaza, I&T Center Street 22, Sector G-8/4, Islamabad.
+92 51 2253303-6
BRANCH OFFICE I
Plot No 16, Second Floor, Sector A, Iqbal Boulevard, DHA, Phase II, Islamabad.
BRANCH OFFICE II
Flat No. 203, 2nd Floor, Creative House, Phase 3 Chowk, Main Jamrud Road, Peshawar.
+92 91 5611714
Email: info@khilji.net.pk Web: www.khilji.net.pk
25

Special Supplement: Commentary ON Recent Notifications of Securities and Exchange Commission of Pakistan

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Special Supplement: Commentary ON Recent Notifications of Securities and Exchange Commission of Pakistan

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KHILJI

IN THE& CONAME OF ALLAH CORPORATE

This issue covers the following SROs.

AMENDMENTS IN THE FOREIGN COMPANIES REGULATIONS, 2018

S.R.O. 926 (I)/2020 dated September 28, 2020

AMENDMENTS IN COMPANIES (INCORPORATION) REGULATIONS 2017

S.R.O. 927 (I)/2020 dated 28th September, 2020

AMENDMENTS IN LIMITED LIABILITY PARTNERSHIP ACT 2017

S.R.O. 925 (I)/2020 dated September 28, 2020

AMENDMENTS TO THE COMPANIES (GENERAL PROVISIONS AND FORMS)

S.R.O. 928 (I)/2020 dated September 28, 2020

OVERSIGHT REGULATIONS FOR SELF-REGULATORY BODIES OF

SECP Vide S.R.O. 919 (I)/2020 dated September 28, 2020

AMENDMENTS TO THE COLLATERAL MANAGEMENT COMPANIES

SECP vide S. R. O. 915 (I)/2020 dated September 25, 2020

AMENDMENTS IN THE FOREIGN COMPANIES

AMENDMENTS ARE AS FOLLOWS: -

a. Name of the entity

“ULTIMATE BENEFICIAL OWNER” means a natural person who ultimately owns or

AMENDMENTS IN COMPANIES (INCORPORATION)

a. Name of the subscriber (natural or legal person)

In case of indirect shareholding, control or interest being exercised through intermediary

Ultimate Beneficial Owner is defined as: -

AMENDMENTS IN LIMITED LIABILITY PARTNERSHIP ACT

 In-case of change in particulars about ultimate beneficial owners or change in ownership

AMENDMENTS TO THE COMPANIES (GENERAL

1 – Additions of New Forms as list below: -

Form 40 Public notice to holders of securities of bearer nature issued by a company

3 – Register of Shareholder / Debenture Holders shall contain following additional information: -

 Every Company is required to Maintain a Register of Ultimate Beneficial Ownership and

particulars of ultimate beneficial owner or his ownership of the company, within a

 The board of directors of every company required to maintain a register of ultimate

5 – Following circulars shall stand deleted: -

6 – Changes related to disclosure about Ultimate Beneficial Ownership and Nomination of

OVERSIGHT REGULATIONS FOR SELF-REGULATORY

Self-Regulatory Bodies (SRB) means followings Institutes: -

These Regulations Comprise of following Chapters in addition to Preliminary: -

1. Duties of Self-Regulatory Body (SRB)

Duties of Self-Regulatory Body (SRB)

Action Points for SRB are as follows: -

Functions of Oversight Body: —

AMENDMENTS TO THE COLLATERAL MANAGEMENT

Definition of “Eligible Pledgee” deleted.

Definition of “Physical Warehouse Receipt” is substituted by new definition of “Goods Receiving

Amendments in Regulation No. 6 - Duties of a Collateral Management Company: -

New Regulations inserted:

 New Regulations No. 6(2) is added:

Amendment in Regulation No. 9 – Permitted Disclosures:

Amendment in Regulation No. 11 – Accreditation of Warehouse:

Previously Conditions for Accreditation of Warehouses were conclusive to the conditions as

Standard Operating Procedures means “Standard Operating Procedures and Warehousing

Substitutions in Regulations No. 11

Clause (m) is substituted as follows: -

Clause (n) is substituted as follows: -

Amendments in Regulation No. 12 - Cancellation of Certificate of Accreditation

Previously cancellation of Certificate of Accreditation was only limited to the Compliance of

Cancellation shall be enforced subject to following conditions: -

In the course of proceedings initiated for cancellation of accreditation of Warehouse, or if

 the imposition of restrictions on any operational activities of the Warehouse, including

 carry out reasonable capital expenditures as may be necessary for maintenance,

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