The Securities and Exchange Commission of Pakistan (SECP) has formulated Collateral Management Companies (Establishment & Operations) Regulations, 2017, under the Companies Ordinance, 1984, a statement said on Wednesday.
The SECP carried out consultative sessions with the major stakeholders, including provincial departments of agriculture, State Bank of Pakistan, Central Depository Company (CDC), Pakistan Agriculture Coalition, Pakistan Mercantile Exchange, and others.
Collateral management, one of the core areas in the National Financial Inclusion Strategy is envisaged to remove distortions, reduce market imperfections, avoid waste and help farmers get the best possible price for their produce, while enabling banks to confidently lend against agricultural produce that is professionally graded, stored and preserved.
The Securities and Exchange Commission of Pakistan is endeavouring to promote electronic trading and warehouse receipt financing of agricultural commodities through the platform of Pakistan Mercantile Exchange to enable the growers get a fair price for their produce, avail of financing facilities and promote an efficient payment system, it added.
The salient features of the regulations are licensing conditions and financial resource requirements for collateral management company, duties of a collateral management company and the warehouse operator, and powers of the Securities and Exchange Commission of Pakistan to conduct inspection of collateral management company, its accredited warehouses and any matter connected with the warehousing business, as well as issue directives to a collateral management company or its accredited warehouse in the public interest.
Reporter. SECP formulates collateral management companies’ rules. The News, May 4, 2017.