SECP notifies CMC regulations

2084

Staff Reporter
Islamabad

SECP has notified Collateral Management Companies (CMC) Regulations, 2019 under the Companies Act, 2017 to promote warehouse receipt financing and electronic trading of agricultural commodities. Under these Regulations, any public limited company with a minimum paid-up capital of Rs. 200 million will be eligible for seeking permission of SECP to register as a CMC. A CMC, through its accredited warehouses, will provide storage and preservation services for a range of agricultural commodities. In doing so, a CMC, through its electronic warehouse receipt system, will issue warehouse receipts which can be used by farmers/depositors of agricultural commodity for financing from financial institutions and trading of electronic warehouse receipt at the exchange. The CMC will play an effective role in the agriculture value chain by ensuring security of collateral stored in the accredited warehouse through its robust oversight mechanism. Earlier, the SECP through a notification dated July 2, 2019 issued draft regulations for public consultation. During this consultative process, comprehensive deliberations were carried out with key stakeholders including the State Bank of Pakistan, Pakistan Banks Association, Pakistan Agricultural Coalition, Pakistan Mercantile Association and commercial banks.

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