SECP amends regulations for non-banking finance companies

ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has amended regulations regarding Non-Banking Finance Companies (NBFC) through SRO 756(I)/2017 issued on Friday.
The SECP made amendments to Non-Banking Finance Companies and Notified Entities Regulations, 2008 and added a new clause in regulation 2. The new clause (xiib) stated: “Element of Income represents the difference between net assets value on the issuance or redemption date, as the case may be, of units and the net asset value (NAV) at the beginning of the relevant accounting period.
Explanation: Element of income is a transaction of capital nature and the receipt and payment of element of income is taken to unit holders’ fund; however, to maintain same ex-dividend net asset value of all units outstanding on accounting date, net element of income contributed on issue of units lying in unit holders fund is refunded on units in the same proportion as dividend bears to accounting income available for distribution.
The SECP also explains the expression account income stating that it means income of an open end scheme, excluding the amount for the year referred in clause xiib of regulation 2, at the close of the financial year or in case of interim distribution any interim date at which the financial statements of the fund are drawn up.

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