SECP notifies draft Asset Backed Securitisation Regulations, 2022

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has notified the draft Asset Backed Securitisation Regulations, 2022 (The ‘Regulations’) for public consultation, a statement said on Wednesday.

These regulations provide a mechanism for the asset-backed securitisation, covering all aspects of the securitisation process, it added.

Currently, the asset-backed securitisation is governed by the Asset Backed Securitisation Rules, 1999 (the ‘Rules’) and the subsequent regulations are drafted to provide holistic regulatory framework under the rules.

The proposed regulations would enable the companies raise funds from the capital market on time and cost-effective manner through the issuance of the asset-backed securities through two modes: public offering and private placement.

Moreover, under these regulations the real estate assets, which have cash generating ability and actionable claims can also be securitised.

Under the proposed regulations, the companies can issue asset-backed securities by creating a special purpose vehicle (SPV) registered with the SECP under the rules where the companies can create 100 per cent-owned SPV. The format of application for the registration of SPV, Fit and Proper Criteria and prospectus is provided as Schedule-I, Schedule-II and Schedule-III to the regulations, respectively.

The regulatory framework has been designed in line with the disclosure-based regime being followed by the regulator and global practices. The process flow for the issuance of the asset-backed securities is covered in detail in draft regulations and summary of the regulations, available at the SECP’s website.

To facilitate the users, a summary of the regulations, highlighting key features is also published, which can also be accessed at the SECP website.

The stakeholders can provide their comments on the draft regulatory framework at [email protected].