1. Short title and commencement .- (1) These rules may be called the Employees’ Provident Fund (Investment in Listed Securities) Rules, 1996.
(2) They shall come into force with immediate effect.

2. Definitions .- All the terms and expressions used but not defined in these rules shall have the same meaning as assigned to them in the Companies Ordinance, 1984 (XLVII of 1984).

3. Conditions for investment in listed securities, redeemable capital etc.- Where an Employees’ Provident Fund of a company decides to make investment in shares of companies, in bonds, redeemable capital, debt securities or similar instruments listed on any stock exchange in Pakistan, such investment shall be subject to the following conditions:

i) Total investment shall not exceed ten percent of the Provident Fund;
ii) Investment in shares of a company or in a particular instrument shall not exceed five percent of the paid up capital of the company or the total issue as the case may be;
iii) Investment shall not exceed one percent of the Provident Fund in any one company or the instrument;
iv) In the case of investment in the shares of listed companies, it shall be made only in the shares of companies which
a) have a minimum operational record of five years; and
b) have paid not less than fifteen percent dividend to their share holders during the last three consecutive years;

v) In the case of investment in the instruments other than the shares of listed companies, it shall not be made unless the instrument has been rated as an investment grade with minimum rating of "BBB" by a Credit Rating Agency registered with the Authority under the Securities and Exchange Ordinance, 1969 and the rating is maintained as such at the time of investment; and

vi) Investment shall not be made in an instrument if it is publicly known that the issuer of the instrument has committed default in respect of any financing facility.

4. Powers of Authority to relax rules.- Where the Authority is satisfied that it is not practicable or necessary to comply with any condition of these rules in a particular case or class of cases, the Authority may, for reasons to be recorded, relax the condition(s) in the case of such company or class of companies subject to such conditions, if any , as may be imposed by the Authority in that behalf.

( MUHAMMAD HAYAT JASRA )
REGISTRAR OF COS. (HQ)

Government of Pakistan Corporate Law Authority
Islamabad, the 26th February,1996
NOTIFICATION

S.R.O. (I)/96.- In exercise of the powers conferred by section 227 read with section 506 of the Companies Ordinance, 1984 (XLVII of 1984), and Finance Division’s Notification No. S.R.O. 698(I)/86, dated the 2nd July, 1986, the Corporate Law Authority is pleased to make the following rules, the same having been previously published as required by proviso to sub-section (1) of section 506, namely:-

THE EMPLOYEES’ PROVIDENT FUND (INVESTMENT IN LISTED SECURITIES) RULES,1996

1. Short title and commencement .-- (1) These rules may be called the Employees’ Provident Fund (Investment in Listed Securities) Rules, 1996.
(2) They shall come into force at once.

2. Interpretation .-- In these rules the words and expressions used shall have the same meanings as are assigned to them in the Companies Ordinance, 1984 (XLVII of 1984).

3. Conditions for investment in listed securities, etc.-- Where it is decided to make investment, out of the provident fund constituted for the employees of a company, in securities of the companies listed on any stock exchange in Pakistan, such investment shall be subject to the following conditions, namely:-

(i) Total investment in listed securities shall not exceed ten per cent of the provident fund;

(ii) investment shall not exceed one per cent of the provident fund in the listed securities of any one company;

(iii) investment in shares or other listed securities of a particular company shall not exceed five per cent of its paid up capital;

(iv) In the case of investment in the shares of listed companies, it shall be made only where such companies--
(a) have a minimum operational record of five years; and
(b) have paid not less than fifteen per cent dividend to their share holders during the three preceding consecutive years;

(v) in the case of investment in securities other than shares of listed companies, it shall not be made unless such securities have been rated as an investment grade with minimum rating of "BBB" by a credit rating company registered with the Authority under the Securities and Exchange Ordinance, 1969 (XVII of 1969), and the rating is maintained as such at the time of investment; and

(vi) Investment shall not be made in a security if it is publicly known that the issuer of the security has committed default while availing of any financing facility.

4. Powers of Authority to relax rules.- Where the Authority is satisfied that it is not practicable to comply with any condition of these rules in a particular case or class of cases, the Authority may, for reasons to be recorded and subject to such conditions as it may deem fit, relax any of the conditions specified in rule 3 in the case of such company or class of companies.

5. Penalty.- Whoever fails or refuses to comply with or contravenes any provision of these rules , or knowingly and wilfully authorises or permits such failure, refusal or contravention shall, in addition to any other liablity under the ordinance, be also punishable with fine not exceeding two thousand rupees, and, in case of continuing failure, refusal or contravention to a further fine not exceeding one hundred rupees for every day after the first during which such contravention continues

[ NO. F. 1(24)CF/POL/94 ]
( MUHAMMAD HAYAT JASRA )
REGISTRAR OF COMPANIES

NO. 1(24)CF/POL/94 Islamabad,
the 2nd Jan, 1995

The Manager,
Printing Corporation of Pakistan Press,
Islamabad

SUBJECT :

Dear Sir,
I am directed to enclose herewith a Notification for publication in Part-II of the Gazette of Pakistan Extra-Ordinary. Fifty copies of the same may please be made available for official use of the Authority.

Yours faithfully,
(MOHAMMAD HAYAT JASRA)
REGISTRAR OF COMPANIES