PACRA ANNUAL COMPLIANCE REPORT

Transcription

1 PACRA ANNUAL COMPLIANCE REPORT (FOR YEAR ENDING JUNE 30, 2014) Clause-wise Compliance on SECP Credit Rating Companies Rules, 1995 (Issued July 26, 1995) THE PAKISTAN CREDIT RATING AGENCY LIMITED

2 Clause Page Clause Page 3 Eligibility for registration 1 6 Cancellation of registration 2 3-(a) Not Applicable 3-(b) 7 Power of the Commission to give Direction 3 3-(c) 3-(d) 8 Submission of rating reports to the Commission 3 3-(e) 8-(1) 4 Registration 2 8-(2) 4-(1) 9 Restriction on Directors of Credit Rating Companies 3 4-(2) 9-(1) 4-(3) 9-(2) 5 Renewal of registration 2 9-(3) 5-(1) 10 Secrecy 4 5-(2)

3 3. Eligibility for registration PACRA Compliance on SECP Credit Rating Companies Rules, 1995 (For Year ending June 30, 2014) A company proposing to commence business as a credit rating company shall be eligible for registration under these rules if it fulfils or complies with the following conditions or requirements, namely: 3-(a) 3-(b) 3-(c) 3-(d) Clause Status Reference / Description That such company is incorporated as a limited company under the Companies Ordinance, 1984 (XLVII of 1984); that such company has entered into a joint venture or technical collaboration arrangement with an internationally recognized credit rating institution for a period of not less than five years; that no director, officer or employee of such company has been convicted of fraud or breach of trust or has been adjudicated as insolvent; that the promoters of such company are, in the opinion of the Commission, persons of means and integrity and have special knowledge of matters which the company may have to deal with as a credit rating company; and. PACRA was incorporated as a private limited company on 18 th August, On 20 th April, 2004, PACRA was converted into a public limited company. Company Registration Number: L-07315/ Companies Universal Identification Number (CUIN): At the start of operations, PACRA entered into a joint venture with IBCA (later FitchRatings). It also had a technical collaboration with the same. In October, 2002, with SECP s approval (via SECP Letter No. SC/MF- JD /44/2003 dated January 21, 2003), Fitch sold out its stake and the technical collaboration agreement was also terminated. Annual undertaking by CEO to the Commission on behalf of all directors, officers and employees Point for discussion: PACRA considers that individual undertakings should be secured from each director, officer and employee in this regard PACRA, at the time of registration had three promoters IBCA (later FitchRatings), International Finance Corporation (IFC) and Lahore Stock Exchange. Their integrity and expertise for the business was duly securitized and confirmed by the Commission when it registered PACRA as a credit PACRA COMPLIANCE REPORT Page 1 of 4

4 3-(e) that the chief executive of the company is not chief executive of any other company or holding similar position in any other company. 4. Registration 4-(1) 4-(2) 4-(3) Any company which is eligible for registration under rule 3 as a credit rating company may make an application in Form I to the Commission for registration. An application under sub-rule (1) shall, besides the other documents referred to in Form-I, be accompanied by a fee of one hundred thousand rupees as registration fee. The Commission may, if it is satisfied after such enquiry and after obtaining such further information as it may consider necessary,- i ii that the applicant is eligible for registration; and that it would be in the interest of the capital market so to do; May grant a certificate of registration to such company in Form II. 5. Renewal of registration 5-(1) 5-(2) The certificate of registration of a company shall be valid for one year and shall be renewable on payment of a fee of ten thousand rupees through an application made on Form III. The Commission shall, after making such enquiry and after obtaining such further information as it may consider necessary, renew the registration of such company for one year in Form IV within thirty days of the receipt of the application or further information, as the case may be. 6. Cancellation of registration Where the Commission is of the opinion that a credit rating company has contravened any provision, or has otherwise failed to comply with any requirement of the Ordinance or of any rule or direction made or given thereunder, the Commission may, if it considers necessary in the rating company (February 14, 1996) Annual undertaking by CEO to the Commission PACRA was registered to operate as a credit rating company by SECP on February 14, Since then, annually, PACRA renews its registration after fulfilling all the requisite requirements Most recent registration renewal certificate was granted to PACRA by SECP on February 6, Not Applicable PACRA COMPLIANCE REPORT Page 2 of 4

5 public interest so to do, by order in writing, cancel the registration of the credit rating company: Provided that no such order shall be made except after giving the credit rating company an opportunity of being heard. 7. Power of the Commission to give directions The Commission may, if it is satisfied that it is necessary or expedient so to do in the public interest or in the interest of capital market, by order in writing, give direction to a credit rating company. 8. Submission of ratings report to the Commission.- 8-(1) 8-(2) Every credit rating company shall submit to the Commission a report giving sector-wise details of credit rating notified during the year, fee structure and any other information, as may be specified by the Commission in writing from time to time, within four months of the close of its accounting year. Explanation.- For the purpose of this sub-rule the expression credit rating means formal evaluation of credit history of the company and capability of repaying its obligations. Without prejudice to the provisions of sub-rule (1), a credit rating company shall furnish to the Commission such other documents, information or explanation relating to its affairs as the Commission may, at any time, by order in writing, require. 9. Restriction on Directors of Credit Rating Companies.- 9-(1) No director of the credit rating company shall be a director of a corporate entity or a business firm or a share holder holding 5% or more of any corporate entity or business firm or in any other way interested in such an entity subject to rating by the rating company: Provided that this restriction shall not apply to a director of a rating company nominated as a director of an entity by the Federal Government or a Provincial Government or an institution which is directly or indirectly owned or controlled by the Federal Government or a Provincial SECP, from time-to-time, provides valuable insight and direction to PACRA and PACRA has been and remains fully committed to operate in accordance with such directions This information is duly submitted to the Commission as part of Annual Filing PACRA has been and remains committed to furnishing and documents / information that the Commission requires at any point in time Annual undertaking by each director to SECP PACRA COMPLIANCE REPORT Page 3 of 4

6 9-(2) 9-(3) Government: 10. Secrecy. Provided further that the director of the rating company shall inform the Commission of such nomination within fifteen days of the receipt of rating mandate from such entity together with an undertaking that he shall not participate in the rating process of that entity; and Neither any change in the shareholding of a rating company shall be made nor the chairman and chief executive of a rating company shall be changed without prior approval of the Commission, in writing. The Commission may, after expiry of the minimum period as prescribed in clause (b) of rule 3, order cessation of the applicability of the provisions of rule 3 to a rating company where the Commission is of the opinion that it would be in the interest of capital market so to do. No director, officer or employee of the credit rating company shall communicate the information, acquired by him for use for rating purposes, to any other person except where required under law to do so. PACRA has duly secured the Commission s approval for any shareholding changes that took place since inception Latest shareholding change SECP approval: November 25, 2011 Change of CEO SECP approval: October 31, 2007 SECP has approved the cessation of the applicability of the technical collaboration requirement for PACRA via its Letter No. SC/MF-JD /44/2003 dated January 21, 2003 For directors: Annual undertaking by each director to SECP For Officers / Employees: Non-Disclosure- Agreement (NDA) signed by each officer / employee upon entry to PACRA ISSUED BY: THE PAKISTAN CREDIT RATING AGENCY LIMITED Awami Complex, FB-1, Usman Block, New Garden Town Lahore Phone: Fax: PACRA COMPLIANCE REPORT Page 4 of 4