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 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)

TO BE PUBLISHED IN PART-II OF THE

GAZETTE OF PAKISTAN
EXTRAORDINARY

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

Government of Pakistan
Corporate Law Authority

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

The Manager,
Printing Corporation of Pakistan Press,
Islamabad

SUBJECT : PUBLICATION OF GAZETTE NOTIFICATION IN THE

GAZETTE OF PAKISTAN EXTRA-ORDINARY
------------------------------------------
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