ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has approved a comprehensive draft regulatory framework under the Securities Act 2015 for the licensing and regulation of debt securities trustees.

In the proposed regulations notified for public consultation, the trustee registration has been replaced with licensing and validity of the licence has been reduced from three years to one year as per requirement of the Securities Act, says a press release issued by the SECP.

Banks, development financial institutions and investment finance companies may act as debt securities trustees if they remain compliant with requirements of the Act and the regulations at all times.

In order to facilitate development of the debt market, the SECP said the debt securities trustees had been allowed to make investment of up to 10% in the debt issue, subject to the condition that they would hold such investment till maturity.

Furthermore, for the protection of investors, approval of two-thirds of the outstanding debt securities holders in value has been made mandatory in case of restructuring or rescheduling of any debt security.

The existing trustees have been given one-year timeframe to comply with requirements of the revised regulations.

The SECP has put the draft framework on its website and it will take into consideration all the comments received by November 22, 2016.

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