KARACHI: The Securities and Exchange Commission of Pakistan (SECP) has approved substantial amendments to the regulatory framework for the non-bank financial (NBF) sector inviting public’s comments.

“The idea is to improve access to finance and promote a culture of savings and investment, leading to an increase in the participation of retail investors in capital markets,” a statement said.

The SECP intends to promote housing finance and enable NBF institutions (NBFIs) to play a key role in the development of the formal housing finance sector, it added.

The proposed regulatory framework has also improved the fit-and-proper criteria for the promoters and majority shareholders of the NBFIs to ensure that the best suitable people are at the helm of affairs.

A balance has been struck between the inherent risk in the operating structure of the NBFIs and the level of regulatory oversight and conditions imposed on them.

In order to ensure that the management of NBFIs is in line with the best practices, the boards of directors have been empowered to take ownership and act proactively. Moreover, to create specialisation and focus on their operations, NBF companies are also being categorised as lending NBFCs, fund management NBFCs and advisory NBFCs.

The drafts of the proposed regulatory framework have been placed on the SECP’s website for the general public and other stakeholders.

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