SECP issued notification S.R.O. 18 of 2018 dated October 16, 2018 whereby additional conditions with respect to Prudential Regulations for Modarabas are incorporated. Additional conditions widened the application and scope of the Fit and Proper Criteria in relation to Modaraba Company and Modaraba.


New conditions / insertions are as follows:

1 – Affidavit, as given in Annexure – B of the Prudential Regulations for Modarabas, shall also be submitted from the ultimate Beneficial Owner of the body corporate, if the body corporate is a promoter or major shareholders of the Moradabad Company.

2 – In-case the promoter or major shareholder is body corporate, while making assessment for fit and proper criteria under Regulation # 5 of Part – IV of the Prudential Regulations, the corporate behavior of the body corporate as well as integrity and track record of the promoters and ultimate beneficial owners of the body corporate shall be assessed, and this will be in addition to the other relevant / applicable clauses.

However while making assessment with respect to Fitness and Propriety of Promoter and Major Shareholder of the body corporate; following two shall be not applicable.

  1. Competence and capability of the person, and
  2. Conflict of interest of such person with the business of the Modaraba Company.

3 – Requirement of information as was required under Annexure – A from Promoters, Proposed Director and Proposed Chief Executive of the Modaraba Company is enhanced.

Link to Document

SECP Circular 19 of 2018