The Securities and Exchange Commission of Pakistan issued guidance that requires companies to maintain records of their related-party transactions. The new recordkeeping rules have an effective date of 1 January 2019.
The guidance—issued as regulations SRO 1194(I)/2018 (11 October 2018) under the Companies Act 2017—requires companies to identify related parties and maintain records of transactions or contracts with these related parties. These rules also apply with respect to arrangements in which a company’s director has an interest.
Under the provisions, a company can enter into an arrangement with a related party only if approved or within a policy approved by the board of directors of the company. These conditions do not apply with respect to related-party transactions if entered into by a company within the ordinary course of its business, on an arm’s length basis (as defined).
Read an October 2018 report [PDF 554 KB] prepared by the KPMG member firm in Pakistan
© 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.