The Securities and Exchange Commission of Pakistan (SECP) has notified amendments to the Corporate Restructuring Companies Rules, 2019.
The amendments made in light of the promulgation of the Corporate Restructuring Companies Act, 2021, are aimed at fostering a conducive environment for Corporate Restructuring Companies (CRCs), the SECP said in a press release.
Corporate Restructuring Companies specialise in acquiring non-performing assets (NPA) from distressed financial institutions, leveraging their expertise to efficiently manage and recover these NPA assets.
The CRC sector is key in minimising stressed assets in the banking sector through market-led solutions, easing balance sheet burdens and enhancing economic stability.
The subject rules have been amended in consultations with the State Bank of Pakistan (SBP), International Finance Corporation (IFC), and the public at large, the SECP said.
Notable provisions of the amendments include the establishment of trusts, comprehensive procedures for liquidation of trusts by CRCs, provisions pertaining to the Corporate Restructuring Board (CRB), encompassing its composition, processing/approval of schemes being presented by CRCs, appointment matters, governance, code of conduct, functions and budgetary allocation for operational efficacy.
It is pertinent to mention here that the subject amendments related to Trust liquidation enable CRCs to efficiently acquire non-performing assets (NPAs) from financial institutions and facilitate funding for such acquisitions by segregating risks and rewards, thereby ensuring appropriate compensation for investors while offering the potential for substantial returns.
Simultaneously, the CRB amendments aim to simplify the regulatory approval process for the Scheme for arrangement.
In essence, the notified amendments are poised to notably improve the rehabilitation process for distressed entities, offering greater opportunities for companies to restructure and restore profitability, ultimately fostering enhanced economic stability.
Good news for the poor people living in Punjab. While taking an oath, Chief Minister Maryam Nawaz Sharif mentioned the poverty of poor people and said that many programs will now start to eradicate poverty in Pakistan. In a recent meeting, Chief Minister Maryam Nawaz announced that a Negahban Program Registration is being started for the deserving and low-income families of Punjab. Under the Negahban relief package program, deserving and low-income families will be provided free ration at their doorsteps during Ramadan.