SBP approval not needed for enhancing authorised capital

RECORDER REPORT

KARACHI: The State Bank of Pakistan (SBP) on Friday allowed exchange companies to enhance authorised and paid-up capital by the existing directors/shareholders without getting prior approval from the regulator.

According to FE Circular No. 02 of 2015, in order to encourage and facilitate all exchange companies including "B" category to increase their capital, it has been decided that henceforth prior approval of SBP regarding enhancement of authorised and paid-up capital by the existing directors/shareholders will not be required.

The exchange company may directly approach Securities & Exchange Commission of Pakistan (SECP) for fulfilment of applicable formalities to increase its authorised or paid-up capital, it added.

Once the SECP's formalities have been fulfilled, the company will accordingly maintain the required Statutory Liquidity Reserve (SLR) with respective area office of SBP, Banking Services Corporation (BSC) and immediately intimate Exchange Policy Department (EPD) and Off-Site Supervision & Enforcement Department (OSED) of the State Bank of Pakistan by submitting the evidence of completion of formalities with SECP, enhancement/injection of capital, and maintenance of SLR with SBP, BSC. It must, however, be ensured that the funds utilised for enhancement of capital of the company are legitimate under related laws. All other terms and conditions on the subject will remain unchanged, the circular said.