SECP amends rules for not-for-profit associations

January 20, 2012 | By More

The Securities and Exchange Commission of Pakistan (SECP) has amended the conditions for granting license to not-for-profit associations under Section 42 of the Companies Ordinance, 1984, regarding allowing of investment in associated companies.

The condition in this regard required that the not-for-profit association shall make no investment, whatsoever, in its associated companies, was originally imposed to restrict improper use of funds by the associations. However, it has been observed that the condition was causing problems for transactions backed by genuine reasons.

The SECP has amended the said condition of license. Now investment in associated companies can be made after prior approval of the SECP. After amendment, the above condition shall read: “The Association shall make no investment, whatsoever, in its associated companies except with the prior approval of the Commission and subject to such conditions as it may deem fit to impose.”


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  1. Zainab Abubakar says:

    Very postive amendment. This will ensure that the funds of an NPO can be invested into companies that are highly profitable within the Group.