31851196 Non Bank Finance Companies 2

8/3/2019 31851196 Non Bank Finance Companies 2

1/43

PRESENTED TO: PROF: SHEIKH USMAN YOUSAF

NON-BANKING

FINANCE

COMPANIESNBFCs

PRESENTED BY: AMAD-UD-DIN FAROOQIM06MBA014

5/15/2008


2/43

2NON-BANKING FINANCE COMPANIES

M

ay

15

,

2008

M

ay

15

,

2008

CONTENTS

Non-Banking Finance Companies 4

Difference between commercial banks and NBFCs 4

Incorporation of NBFC 5

Powers of the SECP in Regulating NBFC 5

Restrictions Imposed By SECP on NBFC for Ceiling of Fraud 6

Investment Finance Company (IFC) 6

Money Market Activities 7

Capital Market Activities 7

Maturity Period of COI & CD 7

Application of Resources Raised Through COI or CD 8

Project Financing Activities 7

Corporate Finance Services 7

General Activities 8

Limits on the Total Investment in Equities (IFC) 8

The Maximum Exposure to Any Single Issuer By NBFC (IFC) 8

Limits on Margin Loans by NBFC (IFC) 9

Investment Companies & Investment Advisory Services 10

Unit Trust or Mutual Fund 10

HAILEY COLLEGE OF BANKING AND FINANCE


3/43


M

ay

15

,

2008

M

ay

15

,

2008

Open-End Fund 11

Close-End Fund 11

Investment Companies & Investment Advisory Services 12

Structure 1 13

Structure 2 14

Asset Management Company 15

Remuneration Payable to Asset Management Company 15

Venture Capital Companies 17

Venture Capital Company (VCC) 17

Venture Capital Fund (VF) 18

Venture Capital Investment (VI) 18

Leasing Services 18

Discounting Services 19

Housing Finance Services 19

Prudential Regulations Regarding NBFCs 20

Status of Securities Issued By NBFC 20

Unsecured / Clean Financing Facility to an NBFC by A Bank 20

Limit on Total Exposure on an NBFC 20

Assuming Obligations on Behalf of NBFC 21

Repealed Laws 21



4/43


M

ay

15

,

2008

M

ay

15

,

2008

List of NBFCs Operating in Pakistan 22

Annexure 24

Form-I (For Incorporation of an NBFC) 24

Annexure to Form-I (Information to Be Supplied with form 1) 24

Form-II (Application for Obtaining License for NBFC) 26

Form III (License to Carry Out As NBFC by SECP) 27

Form IV (Application for Renewal of License) 28

Form V (License to Carry On As NBFC by SECP) 29

Form VI (Application for License as A Venture Capital Fund) 30

Annex to Form VI (Information to be Enclosed with Form VI) 30

Form VII (License to Carry On As Venture Capital Fund by SECP) 32

Form VIII (Application to Renew License as Venture capital Fund) 33

Form IX (License to Carry On Venture Capital Fund By SECP) 34

Form X (Application to Register As an Investment Company) 35

Annex to Form X (Information to be Enclosed with Form X) 35

Form XI (Certificate of Registration as an Investment Company By SECP) 37

Form XII (Information in the Application to Authorize As Closed-End Scheme) 38

Form XIII (Information in the Application to Authorize As Unit Trust Scheme) 40



5/43


M

ay

15

,

2008

M

ay

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 financecompanies (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. Typesof services that fall under the domain of non-banking finance services include the

following:

1. Investment Finance Services

2. Investment Advisory Services3. Asset Management Services

4. Venture Capital Services

5. Leasing Services6. Housing Finance Services

7. Discounting Services

8. Any other form of business activities which the Federal Government may, bynotification 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 throughNBFC Establishment & Registration Rules, 2003issued 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:

Banks and NBFCs both are incorporated under companies ordinance 1984 but abanking 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 deposittaking activity, the assets are largely similar. The NBFCs have an advantage inmanagement 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 notdone 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



6/43


M

ay

15

,

2008

M

ay

15

,

2008

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 grantinglicense 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 NBFCshall 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 aprescribed 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 asmentioned 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 300 million Investment advisory services 30 million

Asset management services 30 million

Venture capital investment 5 million

Leasing 200 million Housing finance services 100 million

Discounting services 200 million

Powers of the Commission in Regulating NBFCs

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.



7/43


M

ay

15

,

2008

M

ay

15

,

2008

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 sharecapital 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 thedate 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 andsisters

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 take-over any other company unless they have obtained approval from the SECP

regarding such merger, acquisition or takeover.

The maturity period of certificate of investment shall not be less than threemonths, 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)



8/43


M

ay

15

,

2008

M

ay

15

,

2008

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 someothers 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 amerchant 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, orinvestments 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 (debtinstrument)

2. Provide professional analysis of securities to both institutional and individual

investor

3. Underwrite stock and shares, TFCs and other obligations4. Manage portfolios of stocks and shares

5. Manage pension funds of different enterprises (defined contribution plans forclients)6. Provide margin loans to individual and institutional investors

7. Offer cash management accounts, security management accounts and to facilitate

clients so that they are able to select various available investment alternatives attheir 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).

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)



9/43


M

ay

15

,

2008

M

ay

15

,

2008

The maturity period of Certificate Of Investment (COI) is not to be less than

three months

The maturity period ofCertificate Of Deposit(CD) isnot to be less than thirtydays.

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 orinvestment finance services or housing finance services business, as the case may be, for

a period oftwo 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 listedsecurities.

Project Financing Activities

1. Underwrite public issue of securities

2. Guarantees loans and obligations3. 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 securities3. 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 systems7. 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.



10/43


M

ay

15

,

2008

M

ay

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



11/43


M

ay

15

,

2008

M

ay

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 theliquid net worth of the NBFC:

Equity investment 10% of the liquid net worth

Margin Loan 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



12/43


M

ay

15

,

2008

M

ay

15

,

2008

Investment Companies & Investment Advisory Services

Investment companies should not be confused with investment finance companies thatare also called merchant bank or investment banks. To understand investment advisoryservice 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 managinginvestment 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 simplewords, 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 orcapital appreciation through increase in the unit price which is quoted daily to reflect the

fair value of net assets managed by the company.

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 orleave 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 normallyevaluated 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


Open Ended

Mutual Funds

Closed Ended

Mutual Funds

Types of Mutual Funds


13/43


M

ay

15

,

2008

M

ay

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 notredeemable 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; evenfew 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 designatedoffices who then issue certificate of ownership.

Open-end fund

i. Issues redeemable units

ii. Not necessarily listediii. Does not conduct general meetings of unit holders

iv. No voting rights of unit holders

v. May issue as many units and redeem them at NAV

vi. Each time, units are directly acquired from or sold to the company through theirauthorized offices

vii. License of investment advisory is required

viii. Units are traded at NAV

Close-end fund

i. Issues irredeemable sharesii. Listed

iii. Conducts AGMsiv. Bestow voting rights to shareholders

v. Has fixed pool of money and does not continuously offer shares, however may

increase its capital under the Companies Ordinance

vi. Shares are acquired from the company on initial public offer and from existingshareholders afterwards

vii. License of asset management services is required

viii. Shares are trades at market price rather NAV reported by the fund managerix. 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.x. 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 lowerxi. No closed ended fund can merge with, acquire or takeover any other closed-end

fund



14/43


M

ay

15

,

2008

M

ay

15

,

2008

xii. No closed ended fund can purchase any security in a forward contract

xiii. No closed ended fund can purchase any security on marginxiv. No closed ended fund can apply for de-listing from stock exchange

Investment Companies & Investment Advisory Services

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 fundwith 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 applicationsubmitted 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 financecompanies 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 asan investment advisorto 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 moreis 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, PakistanCapital Market Fund, Pakistan Premier Fund and Pakistan Strategic Allocation Fund.



15/43


M

ay

15

,

2008

M

ay

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:

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 astrustee through a trust deed (an agreement to safeguard the interest of scattered unitholders). 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 appointedthrough 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.


Trustee Close-Ended

Scheme or Fund

Investment Advisor (NBFC)


16/43


M

ay

15

,

2008

M

ay

15

,

2008

Structure 2:

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 certificateholders 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, amerchant 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 facilitatetransfer. 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. Thiscontract 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 tolaunch 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.


CustodianInvestment Co

(Any Public Co)

Investment Advisor (NBFC)


17/43


M

ay

15

,

2008

M

ay

15

,

2008

Asset Management Company

An NBFC may obtain a licence from the Commission to provide assetmanagement 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 unitTrust. 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 todetermine theNet 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 asto 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

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


TrusteeOpen-ended

Scheme

Asset Management

Company (NBFC)


18/43


M

ay

15

,

2008

M

ay

15

,

2008

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 MetroBank.

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.



19/43


M

ay

15

,

2008

M

ay

15

,

2008

Venture Capital Companies

Venture capitalist is a unique form of financing activity that is undertaken on the belief ofhigh-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 banksare 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 ortechnical 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:

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 CapitalCompany

(VCC) / (NBFC)

Venture

Investment in

Venture Projects.

(VI in VP)

Venture Fund

(VF)


20/43


M

ay

15

,

2008

M

ay

15

,

2008

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 NBFCin 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 activitybased 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 leaseor 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 beexcluded 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 itself2. Engage in leasing operations pertaining to

a. Open landb. 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



21/43


M

ay

15

,

2008

M

ay

15

,

2008

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 leasingbusiness 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 formof 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 therelevant 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 banksunder the guidance of SBP in the form ofPRUDENTIAL 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 withHouse 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 orrenovating any property

b. Lease and rent on hire purchase basis buildings for residential and commercial

purposesc. 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

sectorf. Financing against existing property by way of mortgage



22/43


M

ay

15

,

2008

M

ay

15

,

2008

Prudential Regulations Regarding NBFCs

Prudential regulations are issued by SBPs Banking Policy and Regulation Departmentto 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 aresummarized 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 withoutsecurities 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 bankplacements 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

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 ofborrowers 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,



23/43


M

ay

15

,

2008

M

ay

15

,

2008

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 comfortnor 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 2.5times 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 grantof 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 licensesor 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.



24/43


M

ay

15

,

2008

M

ay

15

,

2008

List of non-bank financial institutions

A. Development Finance

Institutions (DFIs)1. Equity Participation Fund

2. Investment Corporation of Pakistan3. National Investment Trust Ltd.

4. Pakistan Kuwait Investment

Company (Pvt) Ltd.

5. Pakistan Industrial Credit &

Investment

6. Corporation Ltd.

7. Pak-Lybia Holding Co. (Pvt) Ltd.

8. Saudi Pak Industrial and

Agricultural Investment Co.(Pvt)

Ltd.

9. Pak Oman Investment Co.Pvt.Ltd

B. Leasing Companies1. 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

22. Saudi Pak Leasing Company Ltd.

23. Security Leasing Corporation Ltd.

24. Sigma Leasing Corporation Ltd.

25. SME Leasing Limited

26. Trust Leasing Corporation Ltd.

27. Union Leasing Ltd.

28. Universal Leasing Corporation Ltd.

C. Investment banks1. 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.

D. Modaraba companies

1. Al-Zamin Leasing Modaraba2. B.F.Modaraba

3. B.R.R.International Modaraba

4. Financial Link Modaraba

5. First Allied Bank Modaraba

6. First Alnoor Modaraba

7. First Constellation Modaraba

8. First Elite Capital Modaraba

9. First Equity Modaraba

10. First Fidelity Leasing Modaraba

11. First General Leasing Modaraba

12. First Grindlays Modaraba

13. First Habib Bank Modaraba

14. First Habib Modaraba

15. First Hajveri Modaraba

16. First I.B.L.Modaraba

17. First Imrooz Modaraba

18. First Interfund Modaraba



25/43


M

ay

15

,

2008

M

ay

15

,

2008

19. First Islamic Modaraba

20. First Mehran Modaraba

21. First Pak Modaraba

22. First Paramount Modaraba

23. First Prudential Modaraba

24. First Punjab Modaraba25. First Tri-Star Modaraba

26. First UDL Modaraba

27. Guardian Leasing Modaraba

28. Industrial Capital Modaraba

29. Long Term Venture Capital

Modaraba

30. Modaraba Al-Mali

31. Modaraba Al-Tijarah

32. Second Tri-Star Modaraba

33. Trust Modaraba

34. Unity Modaraba

E. Discount & guarantee

houses1. First Credit & Discount Corporation

(Pvt) Ltd.

2. First Prudential Discount &

Guarantee

3. House Ltd.

F. House finance companies1. Citibank Housing Finance Company

Ltd.

2. House Building Finance

Corporation

3. International Housing Finance Ltd.

G. Venture capital companies1. Pakistan Venture Capital

Ltd.Appendix IV

2. National Discounting Services Ltd.



26/43

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 nameand style of * ---------------------------------------------------------------------------------------- The information

and documents as required in the Annexure to this form duly verified and signed by all promoters andproposed 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.


27/43


M

ay

15

,

2008

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).



28/43


29/43


M

ay

15

,

2008

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 imposedhereafter.

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)



30/43


M

ay

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 maybe 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.



31/43


32/43


M

ay

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-dateat 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

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

CRO and twocopies of memorandum and article of association have been

enclosed with the application.

Yes No



33/43


M

ay

15

,

2008

3. Whether processing fee amounting to Rs. has been

deposited in favourof the Securities and Exchange Commission of Pakistan in

designated branch of the bank.

Yes No

4. Feasibility report is enclosed. Yes No



34/43


M

ay

15

,

2008

FORM VII

[see rule 26(3)]


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)

________________________




35/43


M

ay

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

________________________




36/43


M

ay

15

,

2008

FORM IX

[see rule 28(2)]


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 oflicence 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)

________________________




37/43


M

ay

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 investmentcompany and those of the investment adviser thereof whoare members of

a stock exchange.

...................................................

10. Directors interest, direct or indirect in any other investment

company....................................................



38/43


M

ay

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 capitalproposed 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. ...................................................



39/43


M

ay

15

,

2008

FORM XI

[see rule 38(3)]

CERTIFICATE OF REGISTRATION AS AN INVESTMENT COMPANY


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.



40/43


M

ay

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. Ifno, 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:



41/43


M

ay

15

,

2008

(a) Name.


(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 connectedperson of the principal broker?



42/43


M

ay

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.


(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.


(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.




43/43


y

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 thescheme or the asset management company is a connected person of the principal broker?

15. Legal Adviser:

(a) Name.


Documents

31851196 Non Bank Finance Companies 2