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    SECP Approves Commercial Papers' Regulations: Press Release

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    fahad haxan
    The Securities and Exchange Commission of Pakistan (SECP) approved new regulations for issuing Commercial Papers. The regulations aim to help highly rated companies raise short-term funds for financial needs by issuing Commercial Papers. Commercial Papers are unsecured short-term debt instruments issued at a discount to raise working capital. The new regulations replace 2002 guidelines and require issuers to be rated A- or higher, have a minimum paid-up capital of Rs25 million, and appoint a bank as issuing and paying agent. The size of each Commercial Paper issue cannot be less than Rs10 million.

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    SECP Approves Commercial Papers' Regulations: Press Release

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    fahad haxan
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    The Securities and Exchange Commission of Pakistan (SECP) approved new regulations for issuing Commercial Papers. The regulations aim to help highly rated companies raise short-term funds for financial needs by issuing Commercial Papers. Commercial Papers are unsecured short-term debt instruments issued at a discount to raise working capital. The new regulations replace 2002 guidelines and require issuers to be rated A- or higher, have a minimum paid-up capital of Rs25 million, and appoint a bank as issuing and paying agent. The size of each Commercial Paper issue cannot be less than Rs10 million.

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    SECP-approves-Commercial-Papers-Regulations

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    The Securities and Exchange Commission of Pakistan (SECP) approved new regulations for issuing Commercial Papers. The regulations aim to help highly rated companies raise short-term funds for financial needs by issuing Commercial Papers. Commercial Papers are unsecured short-term debt instruments issued at a discount to raise working capital. The new regulations replace 2002 guidelines and require issuers to be rated A- or higher, have a minimum paid-up capital of Rs25 million, and appoint a bank as issuing and paying agent. The size of each Commercial Paper issue cannot be less than Rs10 million.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    30 views3 pages

    SECP Approves Commercial Papers' Regulations: Press Release

    Uploaded by

    fahad haxan
    The Securities and Exchange Commission of Pakistan (SECP) approved new regulations for issuing Commercial Papers. The regulations aim to help highly rated companies raise short-term funds for financial needs by issuing Commercial Papers. Commercial Papers are unsecured short-term debt instruments issued at a discount to raise working capital. The new regulations replace 2002 guidelines and require issuers to be rated A- or higher, have a minimum paid-up capital of Rs25 million, and appoint a bank as issuing and paying agent. The size of each Commercial Paper issue cannot be less than Rs10 million.

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    of 3

    PRESS RELEASE

    SECP approves Commercial Papers’ Regulations

    ISLAMABAD, December 10: The Securities and Exchange Commission of Pakistan (SECP)
    after due consultation with the stakeholders has approved the Issue of Commercial Papers’
    Regulations, 2013.

    The draft regulations were earlier published in the Official Gazette vide notification No.
    S.R.O. 71(I)/2013 dated February 4, 2013, to seek public comments. The regulations are
    aimed at facilitating highly-rated companies to raise funds from the capital market to meet
    their short-term financial needs through issuance of Commercial Papers (CPs), to provide the
    investors an additional financial product and to develop and broaden the domestic debt
    market. The CP is an unsecured short-term debt instrument issued by corporates at a certain
    discount to its face value normally for meeting working capital requirements. The regulations
    have replaced the Guidelines for the Issue of Commercial Papers issued in 2002 by the SECP.

    In addition to certain prerequisite conditions, the regulations provide a set of procedures for
    issue of CPs. The regulations require the CP issuer to be authorized by its Memorandum and
    Articles of Association or other constitutive document, if different from the Memorandum
    and Articles of Association that its equity is not less than Rs25 million, it is rated by a credit
    rating agency (CRA), with rating no less than A- (long term) and A2 (short term), and it has
    appointed a scheduled bank, an investment finance company or a development finance
    institution as an issuing and paying agent (IPA).

    The regulations describe role and responsibilities of the issuer, the CRA and IPA. Under the
    regulations, the IPA has been given a key role. The regulations allow and encourage the issue
    of CPs under the shelf registration arrangement. Under the regulations, CPs can be issued
    only in dematerialized form, i.e. electronic form, therefore, the issuers shall seek eligibility of
    their CPs through the Central Depository System.

    Under the regulations, the CPs can be issued with a maturity of not less than 30 days and not
    more than one year. The size of the issue of a CP shall not be less than Rs10 million. Being
    short-term instruments, the CPs are normally issued to the institutional investors through
    private placement, however, may be issued to retail investors through public offer. In case of
    public offer, approval of the SECP is required whereas in case of private placement no such
    approval is necessary. The regulations require that in case of private placement CP shall be
    issued only to the qualified institutional buyers (QIBs) as defined therein.

    Media and Corporate Communications Department


    Securities and Exchange Commission of Pakistan
    NIC Building, 63 Jinnah Avenue, Blue Area, Islamabad – 44000 Pakistan
    Direct # +92 51 9214005 Fax # +92 51 9206515 Cell: _+92 3028552254
    Email: [email protected]
    www.secp.gov.pk
    A sizeable CP market serves as an anchor for the corporate bond market of a country. So far,
    as many as 34 issues of CPs have been floated by various corporates for an aggregate amount
    of Rs16.15 billion. It is hoped that with the promulgation of the regulations, the CP market
    will further flourish. The regulations are available on the website of SECP at
    www.secp.gov.pk/notification/pdf/2013/S.R.O_1036_CP-regulations_20131204.pdf.

    Tickers:

    1. The Securities and Exchange Commission of Pakistan (SECP) after due consultation
    with the stakeholders has approved the Issue of Commercial Papers’ Regulations,
    2013.
    2. The regulations are aimed at facilitating highly-rated companies to raise funds from
    the capital market to meet their short-term financial needs.
    3. The size of the issue of a CP shall not be less than Rs10 million

    __________________________________________________________________________________________
    Media and Corporate Communications Department
    Securities and Exchange Commission of Pakistan
    NIC Building, 63 Jinnah Avenue, Blue Area, Islamabad – 44000 Pakistan
    Direct # +92 51 9214005 Fax # +92 51 9206515 Cell: _+92 3028552254
    Email: [email protected]
    www.secp.gov.pk
    PRESS RELEASE

    Media and Corporate Communications Department


    Securities and Exchange Commission of Pakistan
    NIC Building, 63 Jinnah Avenue, Blue Area, Islamabad – 44000 Pakistan
    Direct # +92 51 9214005 Fax # +92 51 9206515 Cell: _+92 3028552254
    Email: [email protected]
    www.secp.gov.pk

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