ISLAMABAD: The Securities and Change Fee of Pakistan (SECP) on Thursday notified the Staff Provident Fund (Funding in Listed Securities) Guidelines, 2016 aimed toward securing the arduous-earned cash of staff contributing to such funds.
The SECP undertook an in depth consultative course of earlier than finalising the principles and three conferences have been held on this regard in April 2016 with related stakeholders such because the ICAP, ICMAP and MUFAP.
The Corporations Ordinance, 1984, mandates the sustaining of provident funds by corporations. Owing to market dynamics and so as to encourage provident funds to make investments in listed securities to earn higher returns, Staff Provident Fund (Funding in Listed Securities) Guidelines have been launched in 1996.
With steady innovation in fairness markets and improvement of latest merchandise launched by non-banking finance corporations for higher returns, provident funds acquired higher decisions in, the market.
As danger and return go collectively, subsequently, with a purpose to shield financial savings of staff of the businesses, the SECP drafted new guidelines for the aim.
The funding standards have been tightened the place funding is made out of the provident fund.
The mixture funding in constituting firm or its related undertakings has been restricted to 5 per cent of the dimensions of the fund.
Funding in IPO has been allowed topic to the stringent circumstances and the submission of reviews relating to investments out of provident fund/belief after each six months has been made obligatory.
The provident funds can spend money on securities listed on the Pakistan Inventory Change in Pakistan, however such investments can’t be 50pc of the dimensions of the workers’ provident fund.
The principles additionally say that the offered complete funding in listed debt securities, listed debt collective funding
schemes and cash market collective funding schemes registered as notified entity with the SECP can’t exceed fifty per cent of the dimensions of the workers’ provident fund.
The full funding in listed fairness securities and listed fairness collective funding schemes, registered as notified entity with the SECP, shall not exceed 30pc of the dimensions of the workers’ provident fund.
Revealed in Daybreak, August nineteenth, 2016
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