SECP BPR 2 Volume 6: Conversions, Mergers & Closure PDF

BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 1 Securities and Exchange Commission of Pakistan (SECP) Business Process Reengineering Report 2 - Volume 6 Conversion of Status (Entity type), Change of Status (Active / Inactive), Mergers & Amalgamations and Closure of Company 31 March 2023 BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 2 Structure of Business Process Re-engineering (BPR) Report 02 Name Reservation and Company Incorporation 01 Change Request 02 Periodic Filing 03 07 This volume covers: This volume covers: This volume covers: entry, data rectification, seek advice, payment processes, refunds, appeals, Annual filing of company including filling user registration, login as Authentic user, Service selection, diary and data Name reservation, Permission to Form, Change / Rectification of Name This volume covers common processes in all the above volumes including incorporation and CTC – Combined (Including CNR) of annual returns of active/inactive Name reservation – Separate Change of Objects including principal companies, annual audited accounts, Common Process Repository Permission to form / License of company line of business the appointment/change of directors u/s 42 of Companies Act 2017 and Change in Address and other officers, return of allotment incorporation – Separate Change in details of a Foreign and shares, UBO declarations etc. Registration of Foreign Company Company Half-yearly filing Group registration Quarterly filing Event based Filings and Notices 04 Mortgages and Charges 05 Conversion, Merger and Closure of Company 06 This volume covers: This volume covers: This volume covers: Conversion of Status (Entity type) – Public Induction, cessation, or any change in Registration, modification, satisfaction company to a Private company including particulars of directors and officers and acquisition of Mortgage, Charge & SMC (Vice Versa), Private company to SMC Alteration in share capital, return of Pledge (Vice Versa) (Including Private to LLP) allotments of shares and change in Registration of entire series of Change of Status – Active to Inactive and shareholding Debentures vice versa, Inactive by Registrar Declaration before commencing Registration of more than one issue in a Mergers – By Member(s) / Creditor(s), by business series of Debentures Order of the Court, and Amalgamation of etc.) Statutory report subsidiaries under Section 284 Closure of Company – CEES and Strike off Special Resolution by Registrar Miscellaneous notices BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 3 Table of contents 1 2 3 4 5 Executive Scope of work Approach and To-be Annexures summary methodology processes and business requirements This section provides a This section provides details This section a summary of This section provides the list This section contains summary of the sections on the project background the approach and of changes proposed in the annexures including covered in this report and and scope of work. This methodology used to process, the to be processes proposed changes pending summary list of changes section also provides the list conduct the business along with detailed business decision, content of proposed in the TO BE of services / processes process reengineering requirement documents dashboards, user profiles processes covered in this volume (including explanatory notes etc. where required) Page 05 Page 12 Page 15 Page 17 Page 160 BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 4 List of abbreviations AOA Articles of Association LEAP Leading Efficiency through Automation Prowess AGM Annual General Meeting MOA Memorandum of Association BRD Business Requirement Documents MoM Minutes of Meeting BPR Business Process Reengineering NPS Net Promoter Score BC Business Centre MC Merger Committee BoD Board of Directors NOC No objection certificate CC Commission Committee NICOP National Identity Card for Overseas Pakistanis COS Change of Status NADRA National Database and Registration Authority CEO Chief Executive Officer NTN National Tax Number CNIC Computerized National Identity Card NBFC Non-banking financing Company CPR Common Process Repository POS Point of sale CUIN Corporate Unique Identification Number PIN Personal Identification Number CROI Company Registration Office In-charge POC Point of Contact CEES Company Easy Exit Scheme PVT Private company DO Dealing Officer PCP Printing Corporation of Pakistan DOB Date of Birth ROC Registrar of Companies DEO Data Entry Officer SRS System Requirement Specification DT Design Thinking SECP Securities and Exchange Commission of Pakistan EYFR EY Ford Rhodes SOC Security Operation Centre ERP Enterprise Resource Planning SMS Short Message Service FC Foreign Company SMC Single member company HOD Head of Department SRO Statutory Regulatory Order IT & IS Information Technology and Information System TAT Turn-around time KRN Karandaaz Pakistan XBRL eXtensible Business Reporting Language LLP Limited Liability Partnership XOR The Exclusive Gateway LAD Legal Affair Division TPA Third Party Administration 1. BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 5 Executive Summary BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 6 1. Executive summary A. Scope of Work B. Approach and methodology C. To-Be processes Securities Exchange Commission of Pakistan The Business Process Re-engineering (BPR) for common The process flows have been designed within the ambit of (SECP) is carrying out a digital transformation processes of all the volumes and unique standalone Registration/Incorporation/filing and compliances/ exercise of its core functional processes under processes was conducted using EY’s global ‘Design conversion and merger/dissolution and other unique project LEAP. Thinking’ methodology. standalone processes. The following process flows have EY team is leading the transformation activity been covered; The teams focused on generating ideas through alongside the process reform teams of SECP. collaboration and co-creation in unconstrained ideation Conversion of status (entity type) - Public company to A key component of the project, that precedes the sessions leading to the development of tangible solutions. a Private company including SMC (Vice Versa), technological transformation, is the reengineering of Private company to SMC (Vice Versa) and Private The process profiles were compared with better practices core functional processes. company to LLP. globally and were reviewed in the context of pain points As a part of this transformative journey, this report described by external and internal users Change of Status - Active to Inactive and vice versa, covers the conversion of the entity from one type to The resulting To-Be process flows were mapped to the Inactive by Registrar another, change of status of entity from active to Inactive and vice versa, mergers and amalgamation, functional requirements and the combined processes have Mergers - By Member(s) / Creditor(s), by Order of the CEES and Strike off by Registrar, etc.) been submitted for a final internal ‘buy-in’ from process Court, and Amalgamation of subsidiaries under owners. Section 284 D. Overview of Legislation Closure of Company - CEES and Strike off by Registrar (Winding-up will be covered in BPR phase 03) The types of companies covered in this report are E. Awareness and research Single Member Company (SMC), Private Company, Public Company, Foreign Company, Companies u/s There are two distinct aspects of awareness, research and consideration with respect to the types of companies: i). Entity 42, Companies u/s 45 of the Act and Limited Liability fit’ assessment, and ii). process consideration. Currently, multiple physical and digital channels are available to prospects Partnerships (LLP). The companies may further be and users to engage with SECP. licensed as a specialized company by the SECP to operate as a Capital Market Institution, Insurance However, the overall process could benefit from; provisioning of ‘fit-for-purpose’ assessment / comparison of legal entities, Company and Non-Banking Finance Corporation enablement of fully guided process flows (before and during the activity), information brochures, and video tutorials (with (NBFC). Urdu and other local languages embedded in all information platforms). Pakistan’s regulatory regime in relation to above is The detailed awareness and research section is covered in Common Process Repository. governed by Companies Act, 2017, Companies Regulation, 2022, LLP Act 2017 and LLP F. Business Requirement Documents The BRDs deal with the application’s intended capabilities and Regulations 2018. Further regulations are issued by interactions with the users based on the To-Be processes. SECP for each type of specialized companies. The detailed overview of all regulatory regimes provided The BRDs will serve as a guideline to the developers for the development of specification documents and wireframes. The as Annexure to the Common Process Repository. BRDs deal with the application’s intended capabilities and interactions with the users based on the To-Be processes. The The SECP is empowered under the Companies Act BRDs will serve as a guideline to the developers for the development of specification documents and wireframes. BRDs to register and manage all regulatory affairs for each include data to be entered into the system, operations performed by each screen, workflows performed by the system, type of company. Companies interact with SECP for system reports or other outputs, identifying who can enter the data into the system and description of how the system covers reservation of name, incorporation, and post- applicable regulatory requirements. incorporation filing and compliance. BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 7 G. Summary of unique changes proposed In addition to the changes identified in the user journey which are common across all processes, specific changes to the existing process flows were made as a response to internal user feedback on bottlenecks and review of the As/Is process flows. These changes cover the application fill-in and submission processes and back-end examination, decision making and results. Description Covered in BPR I New in BPR II 1. Applicable across multiple processes The separate Special Resolution filing which was required as a pre-condition for i). Conversion of Status (entity-type), and ii). Change of Status (active/inactive) has been integrated with the respective filing, through a combined application form and a single payment of combined fees, to be filed within the regulatory timeline defined for the respective submission. 1 This could substantially reduce the ease of filing for the applicants and review procedures for the back-end examination, whilst also reducing the overall process TAT. Further, applicant shall also have option for filing of standalone special resolution within 15 days of passing of the resolution as per the current practice. To enhance the ease of the application filling in process, data fields of a special resolution filing done as part of one process, can be auto populated in editable fields for another 2 process requiring a special resolution. Considering that the fields of entry for a special resolution filing are often common for multiple changes, this can significantly enhance the user experience through pre-populated, yet editable fields. The physical affidavits required as attachments with the applications for Change of status (active/inactive) and Merger of companies (by Members) have been replaced with an 3 online declaration from the authorized officers, considerably curtailing the redundant documentation requirements from the applicants. 2. Conversion of Status (entity type) To facilitate the user provisioning of regulatory documents, applicant shall be provided with following options related to Memorandum of Association (MoA) and Articles of Association (AoA) at the time of conversion of status from one company type to another: (i) opt for prescribed electronic short format of MoA/AoA that shall be automatically 4 generated by the system based on the applicant provided fields; (ii) upload updated MoA/AoA as an attachment in the system, (except conversion of a Private Limited company to an LLP where MoA/AoA alteration is not applicable). An end-to-end process flow has been designed for conversion of status (from one company type to another) of licensed entities (NBFCs, Insurance, Capital Markets), which integrates the online applications for conversion and the offline approvals required from the licensing departments, in a single automated flow. In the proposed process design, a licensed entity shall only be able to convert to entity types that are allowed for that particular licensing type through a system-based check (e.g., a public Asset Management 5 company won’t be allowed to convert to a private company), instead of manual back-end examination. If there is a change in the directors / CEO of certain licensed entities (NBFCs, Insurance) at the time of conversion, the application shall be automatically routed to the complete approving hierarchy of the licensing departments for obtaining approval on induction / outgoing directors / CEO. This results in reducing multiple applications and points of contact for the applicants and improves application and action traceability for both the applicant and the back-end teams. To enhance the user experience, customized display and fields of entry have been designed in the conversion application, based on the specific requirements of the entity at the time of conversion. Currently, up to 4 different legal forms (Conversion, Alteration in Share Capital, Allotment of Shares, and Change in Directors / Officers) can be applicable at 6 the time of conversion, based on specific scenarios. The current interface displays all these forms together under 1 application, creating a non-customized application display which can be difficult to navigate and comprehend for the users. In the redesigned process flow, only fields that are relevant and applicable shall be displayed, based on input obtained from the user (e.g., if the user input indicates that there is no new allotment of shares, the fields required in case of allotment of shares won’t be displayed). 3. Change of Status (active / inactive) Under the redesigned process, an inactive company can change its status to active if it has submitted all applicable Annual Returns for the years during which the company was inactive, without requiring any backend examination. This shall significantly reduce the manual back-end effort that was required previously and shall considerably improve the 7 process Turnaround Time (TAT). The DO CRO shall be automatically prompted with a list of non-compliant entities on a monthly basis with an option to generate report on his/her discretion for considering involuntary inactivation, instead of manual extraction of the list, as was done previously. 4. Mergers & Amalgamations An end-to-end integrated online process has been designed for Mergers (by Members / Creditors / by Court Order), which were previously carried out in the offline mode only. A 8 new standardized application form has been proposed to initiate merger request by Members and Creditors, instead of non-standard physical applications. The online process design removes multiple laborious and manual procedures for the users such as filling out the information that is already available in the system (to be auto fetched and filled out for the applicants), the requirement for physical signatures on the application (replaced with online PIN), and the requirement for a physical affidavit (replaced with an online BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 8 Description Covered in BPR I New in BPR II declaration, noted above). To reduce redundant approvals, the approvals required from the Commission Secretariat regarding the issuance of order to hold members / creditors meeting for mergers have now been tasked to the Mergers Committee at the time of review of the application. The Commission Secretariat shall only be involved for the issuance of the final order of Merger In case of Amalgamation of subsidiaries, the back-end review and approval mechanism of the Amalgamation request has been designed to be automated, including the approvals 9 of the Mergers Committee (MC). These changes can significantly enhance the user experience of application filing by removing redundant applications and provide a clear electronic record of all review and approval activities, whilst reducing the manual backend efforts of updating the records of the amalgamating entities. H. Summary of common changes proposed A benchmarking assessment was performed to identify current best practices on the process steps within registration, filing and compliance in both the BPRI and BPR II exercises. The benchmarking assessment was based on the key improvement areas, such as service initiation, form filling, payment as well as results delivery. The countries selected for the benchmark included Estonia, Lithuania, New Zealand, Singapore, Cyprus, Luxembourg, the United Kingdom and Sweden which have a relatively higher maturity of digital services. The main findings from the global practices were structured around the core flow, which is consistent across the regulators around the world. The below changes have been commonly adopted across all process streams based on such benchmarking: Description of Change Proposed Discover (Discovery of Services) When discovering a service, better practices indicated that the users should be assisted in identifying the most suitable legal entity type. The information on the required documents, fees, payment methods and the application processing time should be available upfront publicly. The platform should aim to distinguish users before they initiate a service and personalize user experience (e.g., specific types of services and process variations displayed to users). User should be able to reach the service application form in the most optimal and minimal number of clicks. # Proposed practices Local* Lithuania Cyprus Estonia 1 A smart check-box questionnaire-based activity on the webpage that identifies the ‘appropriate’ type of legal entity for each business to support user decision making. A static page that compares different legal entities on multiple parameters (personal liability, registration costs, post-incorporation compliance requirements and fees, 2 management, ownership, and taxation, etc.) to inform user decision making. Develop and publish digital / printed brochures and tutorial videos in Urdu, English and local regional languages detailing the different types of legal entities, incorporation 3 modes and requirements, personal liability, registration costs, post-incorporation compliance requirements and fees, management, ownership, and taxation, etc. Relevant filing options specific to the type of company should be available based on applicability of the service to the entity. Not all processes are applicable to all types of 4 entities and a generic display negatively affects the design and user experience. Initiate (Initiation of services) When initiating a service, better practices consider that a process guidance is available to the users, providing information on what documents shall have to be submitted when registering. Users should know why their application may be rejected. Online mode should always be encouraged (i.e., cheaper, and shorter processing time). Electronic identification means should be available for user authentication. Proactive notification and / or reminder should be sent to the user to initiate the service, wherever applicable. # Proposed practices Local* Lithuania Estonia NZ UK Singapore Sweden Provision detailed process guidance notes in Urdu, English, and local languages at the start of the process flow in the system to enhance ‘first-time-right’ submissions. The 5 notes include information on ID verification, documents/attachments required, payment options and fees, time required, and user type specific requirements (e.g., foreign applicants). Develop and publish tutorial videos in Urdu, English and local regional languages detailing the step-by-step guide for registration, incorporation, filing and compliance 6 processes to facilitate user understanding of the process. For post-incorporation mandatory compliances, auto-alerts should be sent to the users and display “what is due” with call-to-action to respective filing and compliance 7 processes. BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 9 Description of Change Proposed Fill-in (Filling in the form to provide the required information) When filling in the application, better practices provide that the entire process flow should be guided, with mandatory fields and attachments, separately and identifiably available. The main forms should be adjusted based on user answers to create a customized display (e.g., not applicable fields not being available based on type of entity). The data that the agency has about the user should be automatically pre-filled in the forms. Examination checks should be built into the system / automatically flagged, wherever, possible. # Proposed practices Local* Lithuania UK Enable a guided process flow with information availability during the flow in Urdu, English, and local languages (information icon-based provisioning as tooltips) to enhance 8 ‘first-time-right’ submissions. The user interface has been provisioned with all the fields required in the legal forms prescribed in the applicable regulations, however, the interface has been designed 9 based on a simplified field-based input instead of the complicated form-based filing to enhance the user experience, understanding and readability. The legal form shall be auto-populated by the system based on field-based inputs as an "on-demand" option only to the users. Only relevant fields in any form shall be displayed to the user based on specific information obtained at the start of the form (or during the process, if applicable) to create a customized display. Any field that is not applicable to the entity, and is known through user input, shall not be made part of the form display for the user (e.g. in case of 10 change in address of the entity from one city to another within the same province, only the fields that are specific to the change in city shall be displayed to the user instead of the complete requirements that may only be applicable for a change in province). Certain fields which are already available in the system/database shall be prefilled by the system (e.g., name, address, body corporate specific information through CUIN, 11 etc.). The applicant input shall be validated by the system as per defined format for consistency (e.g., date through calendar drop-down, CNIC specific input fields, number input 12 fields for share capital, currency etc.) All required attachments / uploads shall be displayed with the relevant sections / fields, so that the user can separately and distinctly identify what is required to be attached 13 and where (as opposed to multiple combined attachments). Pay (Paying for the service) When paying for the services, better practices indicate that the payment should be processed and/or finalized in the same step as the application form submission, not separate from it. The process flows should be designed to ensure that a single payment is made instead of multiple payments for interlinked services. In these jurisdictions, fees are calculated automatically, and any late/special fees or penalties are integrated in the calculation engine. Moreover, multiple payment methods, and channels are available. # Proposed practices Local* Lithuania UK For all payments, one data base shall be used for generation of challans and calculation of fee. The system shall automatically calculate the fees based on services selected by the applicant / customer during the form completion (from 7th schedule of the Companies Act, 2017 in case of companies and provisions of the LLP Act, 2017 in case of LLPs). User shall not have the option to changes / modify the list of services requested. All late fees from the relevant regulations shall also be incorporated in the fee 14 calculation based on the trigger (e.g., number of days from the event date), as defined. User shall be provided with a detailed break up of fees calculation. In case of offline submissions, the services shall be manually selected by the applicant in the M-Challan from a drop-down, however, fee calculation shall be automatically (as defined above) to avoid input errors by users and banks. 1Bill payment gateway integration shall enable real time verification of payments without manual input by the bank or the user and increase the number of banking options for 15 the users. 1Bill option is available on all internet and mobile banking platforms, including branchless banking wallets, and is available on the counter of all branches of all banks. Submit (Submitting the application form) When submitting the application form, better practice platforms consider that the users should be able to review entire application form before submitting it. Users should be notified about successful or incorrect field filling when submitting the form. When field is filled incorrectly error message should appear with explanation how to correct the error. User should be informed about the successful request for the service. User can receive application ID (e.g., tracking number) to inquire about delivery process status. # Proposed practices Local* Lithuania Estonia New Zealand BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 10 Description of Change Proposed 16 All applications shall prompt the user in case a mandatory field, approval pin from a required user, and/or a mandatory attachment has not been provided with specific information on what’s missing. 17 Users can save their application at any stage and come back to pick it up from where they left it. The incomplete application will remain available on the dashboard for 60 days from the date of creation of the application. 18 The user who has created and submitted the form will have an option to "revert to draft" any application till the time payment is made. Changes can be done by the applicant who has submitted the original form. 19 The user who has created and submitted the form will have to make the payment within 7 days of submission. If payment is not submitted within 7 days of the initiation of an application, the application shall stand canceled automatically. All application-specific data saved for that application will be lost, and a new application will need to be initiated from scratch in case the applicant needs to apply again. 20 A unique application number shall be allocated for end-to-end process tracking that can be used by both the applicants and internal SECP teams for specific queries, correspondence, tracking, recording and reference. 21 Each attachment will be provided a unique number which will link to the process (i.e., the attachments uploaded in the system shall be suffixed to application reference number for better tracking and identification). 22 For offline submission, standardized checklist of required documents shall be available to the front desk officer to ensure completeness of application. 23 For offline submission, the diary module shall be integrated with the system and unique application number shall be allocated at the time of entry in the diary for better tracking and control. Decision (Examination / assessment of the request / application) When the service provider agency or regulator is examining the application before arriving at a decision, better practices provide that the application status and pending tasks should be accessible to the user (through dashboard and notifications). There should be easily accessible communication, response, and action tracking available to both the user and the internal teams. The examinations checks should be in line with the guidance provided to the user and examination checks should be automated and front-loaded to the application stage, wherever possible. # Proposed practices Local* Lithuania Estonia New Zealand Interactive user-friendly dashboards shall be available for all internal users for better tracking / monitoring of day-to-day tasks. Overdue applications should be displayed to 24 DOs / BCI / CROI on their dashboards. A 360-degree view of a company shall be available to the DOs / CROs / BC teams engaged in the examination of the company. This shall include the entire history of 25 activities performed on the company such as changes in name, and address, non-compliances, etc. This shall be displayed as a history log of changes/applications and documents submitted. 26 Standardized checklists shall be available to all examination officers to ensure consistency in examination practices, specified for each type of process. The interface of Dealing Officer shall display the necessary search links (e.g., list of prohibited / restricted words, rejected names, IPOs, etc.) to facilitate the examination 27 process. Display the profile(s) of the individuals being examined to Dealing Officers, with the historical information regarding all companies / LLPs where the Partner/Director is marked 28 in any capacity (Promoter/Shareholder/Director/Partner/Officer), to support the examination process. The system shall provide multiple options for the allocation of cases to DOs / Other officers. The default mode will be alphabetical order allocation; however, the Business 29 Center In-charge / Head of Wing / CRO In charge shall have the option to allocate cases based on workload, activity type, sector, company type, round robin basis. The system shall be provisioned to include a configurable rules-based functionality to allow chronological and event-based prioritization for processing filing applications for 30 example earlier year application to be processed first, etc. 31 A separate process for ‘seek advice’ has been developed through which the advice can be sought by the DO/CRO In charge/BC in charge from anyone in the organization. The correspondence can also be linked to any specific case by selecting it from a drop-down of open cases (application number), in which case the read-only version of the BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 11 Description of Change Proposed application shall be available to the individual from whom the advice has been sought. The "Seek Advice" option shall be available on the DO/CRO In charge/BC in charge dashboard as a single tab. The comments on any specific process are to be made part of the case noting sheet. Auto reminders to customers for issue resolution have been added i.e., the first reminder on the 8th calendar day from the date the issue is marked to the customer and a second reminder on the 15th calendar day from the date the issue is marked to the customer. On the 15th calendar day from the date the issue is marked to the customer, 32 the DO shall have an option to either discard the application or grant an extension based on valid grounds. The extension shall be for a fixed number of days, as defined by the DO in the system. Additional auto-reminders to be sent to the customers 14 days and 7 days before the expiry of the extension period. All comments from DO/CRO In charge/BC in charge shall be populated in a common "Internal noting sheet" available within the application in chronological order for internal 33 users. All correspondence between the external users and the DO shall be populated in a common "external noting sheet" available within the application in chronological order for both the internal users and the applicants. Result (Acceptance, rejection, or objections on the application) Better practices consider that the users should receive the decision via digital means (i.e., the result is the record in the register). A trail of historic filings and action should be available at both ends i.e., the users and the internal teams. # Proposed practices Local* Lithuania The system shall generate notifications via email / SMS to applicant for change in status of application as application submitted, challan generated, payment failed, payment 34 verified, application accepted / rejected / objected. A 360-degree view of a company shall be available to the users. This shall include the entire history of activities performed on the company such as changes in name, and 35 address, non-compliances, etc. This shall be displayed as a history log of changes/applications and documents submitted. Feedback (Tracking improvement opportunities with user feedback) For identifying possible improvement opportunities, most better practice jurisdictions enable users to provide feedback through different forms (i.e., short questionnaires / web integrated surveys / feedback buttons), during and at the end of the process. Process driven metrics are essential to gauge and improve the performance and repeatability of existing processes. # Proposed practices Local* Singapore Luxemburg 36 Short feedback on the application submission process and then at the completion of the examination process should be obtained from the users to track improvement areas. Turnaround timelines (TATs) for each process and Process Performance Indicators (PPIs) have been defined that include the Net Promoter Score (NPS), effort score, and 37 satisfaction scores. In addition to user provided metrics, some other metrics such as the percentage of ‘First-time-right’ submissions and ‘uptake of digital services’ have also been defined as key monitoring parameters. *Local practices include some commonly applied practices in information and awareness, payments, PIN application, etc. in governmental agencies/regulators/private sector service entities in Pakistan. 2. BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 12 Scope of work BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 13 2. Scope of the work Securities and Exchange Commission of Pakistan (SECP) has envisioned a digital transformation program named Leading Efficiency through Automation Prowess (LEAP) to position SECP as a role-model regulator through end-to-end automation and digitalization to deliver a world-class experience to its stakeholders. SECP has identified key business processes that need to be reviewed, documented, re-engineered and automated. To enhance the user experience; through LEAP, end to end automated process execution will be achieved to meet the needs of internal and external stakeholders in terms of ease of doing business, expansion in online payment channels, integrated information exchange, real time business monitoring and business intelligence reporting. This scope of work for the SECP Digital Transformation Program has been agreed in the Engagement Agreement signed between Karandaaz Pakistan (KRN) and EY Ford Rhodes (EYFR) dated 18 March 2022 and further realignment with respect to scope of work, as agreed in the inception phase, approved by 19th LEAP Steering Committee meeting held on 28 May 2022. Following are the key objectives of the project: To understand To review and update To re-engineer / improve business To enhance To prepare the To assist SECP in the current existing Digital, processes for in-scope functional information Request for Proposal managing implementation landscape from Information technology areas using design thinking security through (RFPs) and assist of technology initiatives processes and (IT) and Information approach to enhance end-user Security with the technical through project systems System (IS) strategies experience keeping in view the Operation Centre evaluation process for management office over its perspective. including Technology laws, rules, and regulations of (SOC) and XBRL before onboarding project period of 18 months. roadmap SECP. implementations. This report has been prepared under the BPR section of the scope of work and covers the list of proposed changes and TO BE processes for the Conversion of Status (entity type), Change of Status, Mergers & Amalgamations and Closure of company across all types of companies established under the Companies Act, 2017. The following matrix define the applicability of processes across each type of company: Applicability Legal Form Process Process Particulars Section Foreign TOs Reference Reference SMC Public Private 42 Conversion of From one company type to another (except listed App, Form 26, 9, 4.1    N/A N/A x Status (entity company*) 3, 7 type) Private to LLP Form 26, LLP N/A N/A  N/A N/A x Form VI, III, IV Change of Status Active to Inactive and vice versa by the Applicant App-2 4.2.1  (except   N/A x Active to inactive by Registrar, SECP N/A 4.2.2 listed companies) Mergers & Merger by Members** Non-existent 4.3.1    N/A N/A x Amalgamations Merger by Creditors** Non-existent 4.3.2    N/A N/A x Merger on Court Order N/A 4.3.3    N/A N/A x Amalgamation of wholly owned subsidiaries*** Form 8 4.3.4     N/A x Closure of Company Easy Exit Scheme (CEES)***** App-4 4.4.1  (except   N/A x company**** listed companies) Strike off by Registrar, SECP from list of defunct N/A 4.4.2      x companies BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 14 * Conversion of listed company to public unlisted company and vise versa and Listed company to private company shall be covered in BPR 3. ** Meger by members / creditors shall only be applicable for small sized companies or public sector companies (PSCs) wholly owned directly or indirectly by the Federal Government. *** Amalgamation of wholly owned subsidiaries shall only be applicable to Subsidiaries wholly owned by a holding company/wholly owned by a person. A company registered under section 42 that is a holding company desiring to amalgamate into its subsidiaries can only do so if such subsidiaries are also registered as a company registered under Section 42. ****This volume does not contain the processes related to Voluntary Winding up by members/creditors, Winding up by Court and Winding up under Supervision of Court whch will be covered in BPR Report 3. ***** An in-active company shall also have an option to initiate Company Easy Exit Scheme (CEES) if that company is compliant with all the regulatory requirements. ***** The Company Easy Exit Scheme (CEES) does not apply to housing, real estate development or real estate marketing business. 3. BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 15 Approach and methodology BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 16 3. Approach and methodology In conducting the BPR for the target process streams, the global ‘Design Thinking’ based methodology was leveraged to generate, capture, and define improvement ideas. ‘Scan, Focus, Act’ as it is a tried and tested method that has been applied in various internal and external contexts. Its value lies in providing a structure that enables not only the identification of pain points / bottlenecks but also the generation of solutions, ensuring that optimal value can be realized. The framework guided the teams through a process of understanding or seeking problems, creating, exploring, and validating possible solutions, defining the impact, and finally incorporating the solutions in the revised process flows. Post kick-off of BPR II exercise, the teams focused on understanding the current profile in terms of the ‘As-Is’ state of the processes, technology enablers, organizational roles, Process Performance Indicators (PPIs) etc. The information has been reviewed in the light of the ‘To-Be’ models already developed by the SECP BPR team, to understand the existing bottlenecks and possible solutions. The process profiles were compared with the available knowledge pool (better practices globally) and pain points described by internal users in the existing process flows to define a high- level to-be state ambition. The countries for the assessment included Estonia, Lithuania, New Zealand, Singapore, Cyprus, Luxembourg, the United Kingdom and Sweden, which have relatively higher maturity of digital services. The key benchmarking areas included 8 functional attributes of service design vis-à-vis discovery, initiation, filling, payment, submission, decision, results, and feedback. The key takeaways form the exercise suggested several replicable practices such as: assisting prospects in identifying the most suitable legal entity type, comprehensive information provisioning before and during the process, guided / facilitated process design, field-based request / filing mechanism instead of form based, minimal data entry requirements, automated instead of manual checks on name conformance and other examinable areas, payment integration, status dashboarding, and feedback pop-ups, amongst others. Some of these changes were already identified during the BPR I exercise and were applicable in the process design for target process streams of BPR II. The resulting To-Be process flows were mapped to the functional requirements in the respective BRD sections and the reports have been submitted for a final internal ‘buy-in’ from process owners. The To-Be process flows that are part of this document have already been provided to the Technology partner, Techlogix, for the development of parallel wireframes based on the proposed process design. These wireframes shall be reviewed alongside the internal users to develop a soft internal consensus on the proposed reforms for enhancing efficiencies in the context of current regulations and other environmental factors. Throughout the course of the BPR activity, the teams generated ideas through collaboration and co-creation in multiple consultation modes i.e., 1-1 discussions with process owners, and focus group discussions with relevant stakeholders. For the larger Design Thinking (DT) workshop with internal and external users, it was decided by the SECP team in a meeting held on 01 September 2022 that the session shall be scheduled after the wireframes have been reviewed internally by SECP and process owners. The DT workshops shall be structured around the proposed design of the SECP reviewed wireframes. The wireframes shall be rigorously evaluated in these unconstrained ideation sessions. Any changes in the proposed To-Be processes, resulting from these sessions, shall be made part of the System Requirement Specification (SRS) documents being developed by Techlogix. Overall approach used for the BRP is illustrated in the figure: 4. BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 17 To-be processes and business requirements BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 18 A. Legends for process flows Symbol Description Symbol Description Start Event The Start event symbol is used to mark the beginning of a Exclusive Gateway The Exclusive Gateway (XOR) represents a normal gateway. process. Only one path is taken out of the gateway (for example, yes or no) Milestone Horizontal section of the diagram that describes a logical group Parellel Gateway The Parallel Gateway represents a gateway where multiple of activities. paths can be taken out of the gateway (for example, yes or no) Swimlane A department or position responsible for carrying out the task. Error Error event causes an exception to happen at that point in the process. The process continues its flow after this point, but often this indicates that an event occurred that an external participant or system must handle. Sequence Flow Shows connections and flows between different objects (events, Timer Timer event indicates that a process should wait for a specific gateways, activities). time or cycle to proceed. Activity Describes a basic level of task performed by the Swimlane Message Message indicates communication with the user via email / participant, which cannot be broken down further. SMS / dashboard notification or courier. Common Process Describes a group of sub-tasks / further hierarchy of a task End Event The End event marks the ending point of a process. which are common for all processes and are covered in detail under the common repository. Sub Process Describes a group of sub-tasks / further hierarchy of a task Manual step A purple box indicates a step perfomrmed outside the LEAP which are unique for each process and are covered in detail system under the same report. BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 19 B. List of proposed changes (common for multiple processes) The separate Special Resolution filing which was required as a pre-condition for i). Conversion of Status (entity-type), and ii). Change of Status (active/inactive) has been integrated with the respective filing, through a combined application form and a single payment of combined fees, to be filed within the regulatory timeline defined for the respective submission. 1 This could substantially reduce the ease of filing for the applicants and review procedures for the back-end examination, whilst also reducing the overall process TAT. Further, applicant shall also have option for filing of standalone special resolution within 15 days of passing of the resolution as per the current practice. Change Type Change Impact Process Reference ► Improved User Experience 4.1.2 (1.1) ► Reducing additional filing ► Reduced back-end effort 4.2.1.1 (1.1) ► Reduced TAT Existing practice Proposed practice Regulatory Implication Companies Act, 2017 has specified scenarios where the companies The applicant shall have following options for filing of Special resolution in Corresponding alignment are required to pass and file a special resolution and submit the case of Conversion of Status and Change of Status: required in: extracts of the resolution within 15 days from the date of the general (i) File a standalone special resolution within 15 days of passing of the ► Section 150 (1), 197(3), meeting. The scenarios, amongst others, include: resolution. In case if the special resolution has been filed separately, the 85(4), 465(4) of the ► Conversion of Status (from one entity type to another such as system shall require the applicant to provide the reference ID of the Companies Act, 2017 Private Limited to LLP or Private Limited to Public Limited respective special resolution and all the fields of special resolution shall be ► Regulation 38, 41 of the company) auto fetched by the system. if the special resolution is filed after 15 days from Companies Regulations, ► Change of Status (from active to inactive and vice versa) the date of passing of special resolution, late fee as per 7th schedule shall be 2022. The pre-requisites of a special resolution are: charged on the special resolution. ► An agenda notice is sent to the members specifying the (ii) File special resolution along with the filing of respective application of requirement of passing the resolution Conversion of Status / Change of Status. Combined fee for both (i.e., special resolution and respective application) shall be charged as a single payment ► It is passed by a majority of 3/4th of voting members (or proxy) and all the data fields of the Special Resolution and respective application Currently, the special resolution is required to be filed separately from shall be displayed to the applicant as a single interface. the respective application. Regulatory timeline for the corresponding The combined application forms shall be reviewed by the back-end conversion of status (entity type) application is 90 days, from the date examination teams in one-go, substantially reducing the back-end of the passing of Special resolution while there is no defined timeline examination effort and overall process timeline. for filing an application for Change of status (active/inactive). However, the timeline for filing of special resolution is 15 days for all cases from the date of passing of the special resolution. To enhance the ease of the application filling in process, data fields of a special resolution filing done as part of one process, can be auto populated in editable fields for another 2 process requiring a special resolution. Considering that the fields of entry for a special resolution filing are often common for multiple changes, this can significantly enhance the user experience through pre-populated, yet editable fields. Change Type Change Impact Process Reference ► Automatic fetching of data in fields already available in the ► Improved User Experience 4.1.2 (1.1) database ► Reduced TAT 4.2.1.1 (1.1) Existing practice Proposed practice Regulatory Implication BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 20 Companies often choose to submit the same Special Resolution for Under the proposed mechanism, where a special resolution has been filed None multiple separate filings, covering all agenda items. Currently, there as part of another process, the details of the previously filed special is no functionality in the system to link a special resolution already resolution can be auto fetched, upon selection by the user, and prefilled by filed, to another process for ease of replicating the contents to the system in editable fields. The applicant may edit the details, as required. another filing. This will not include any previously submitted attachments, which will be required through a separate attachment field. The physical affidavits required as attachments with the applications for Change of status (active/inactive) and Merger of companies (by Members) have been replaced with 3 an online declaration from the authorized officers, considerably curtailing the redundant documentation requirements from the applicants. Change Type Change Impact Process Reference ► Removing additional/redundant document(s) for the applicant ► Enhanced User Experience 4.2.1 ► Reduced TAT 4.3.1 Existing practice Proposed practice Regulatory Implication Certain processes require duly signed affidavits along with the The requirement of affidavits along with the applications for Change of status ► Modification to Regulation applications, which are: and Merger of companies (by Members) has been replaced with an online 31(1)(f) of Companies ► For change of status (Active to inactive and vice versa): Affidavit declaration requiring similar assertion from the authorized officer of the Regulations, 2022. attested by an Oath Commissioner is required under regulation company. Considering that under the redesigned processes most of the ► App-2 of Companies 31(1)(f), duly signed by the person signing the application. The information of the company shall be auto fetched by the system instead of Regulations 2022; and affidavit requires verifying that the contents of the application and being manually provided, the need for a physical affidavit is reasonably ► Section 279(2) of the attached documents are true and correct. redundant. Companies Act, 2017 ► Merger of companies (by Members): Affidavit from the person signing the application that all material facts relating to the company, such as the financial position of the company, the auditor’s report on the latest accounts of the company, the pendency of any investigation proceedings in relation to the company, and the like under Section 279(2) of the Companies Act 2017, have been disclosed to the Commission. BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 21 4.1 Conversionofof Conversion Conversion of Status(entity type) Status Status BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 22 A. List of proposed changes To facilitate the user provisioning of regulatory documents, applicant shall be provided with following options related to Memorandum of Association (MoA) and Articles of Association (AoA) at the time of conversion of status from one company type to another: (i) opt for prescribed electronic short format of MoA/AoA that shall be automatically generated by the 1 system based on the applicant provided fields; (ii) upload updated MoA/AoA as an attachment in the system, (except conversion of a Private Limited company to an LLP where MoA/AoA alteration is not applicable). Change Type Change Impact Process Reference ► Automatic fetching of data in fields already available in the ► Improved User Experience 4.1.2 (1.14) database ► Reduced TAT Existing practice Proposed practice Regulatory Implication The Memorandum of Association (MoA) and Articles of Association At the time of applying for conversion of status from one company type to None (AoA) acts as a documented charter for the company which specifies another, the applicant shall have following two options regarding the the Name, Objects, Registered Address - Province, Limitation of MoA/AoA: Liability, and Capital Structure of the company. Currently, the 1- In case where company applying for conversion already has prescribed Memorandum of Association (MoA) and Articles of Association (AoA) electronic short format of MoA/AoA: A system-based MoA/AoA shall be of a company is system generated at the time of incorporation, with generated at the time of conversion of status from one company type to standard clauses based on the type of entity. In case a conversion of another. The updated MoA shall have the specific sections updated based on status application is submitted by a company not having system the fields of entry by the user. generated MoA/AoA, an amended MoA/AoA is required as a manual 2- In case where company applying for conversion have not previously attachment, with the change(s) requested in the filing incorporated adopted prescribed electronic short format of MoA/AoA: The system shall into the manual document, which is then reviewed by the Dealing provide following two options to the applicant: (i) Opt for prescribed electronic Officer. In case of conversion of status application is submitted by a short format of MoA/AoA that shall be automatically generated by the system company having system generated MoA/AoA and no subsequent at the time of conversion of the status based on information provided by fillings that effect MoA/AoA, an amended MoA/AoA is generated applicant in the application; (ii) Upload updated MoA/AoA as an attachment through system. in the system with the conversion of status application. (This is not applicable in case of conversion of a Private Limited company to an LLP where since a partnership agreement is required in place of a MoA/AoA in that case.) An end-to-end process flow has been designed for conversion of status (from one company type to another) of licensed entities (NBFCs, Insurance, Capital Markets), which integrates the online applications for conversion and the offline approvals required from the licensing departments, in a single automated flow. In the proposed process design, a licensed entity shall only be able to convert to entity types that are allowed for that particular licensing type through a system-based check (e.g., a public Asset Management 2 company won’t be allowed to convert to a private company), instead of manual back-end examination. If there is a change in the directors / CEO of certain licensed entities (NBFCS, Insurance) at the time of conversion, the application shall be automatically routed to the complete approving hierarchy of the licensing departments for obtaining approval on induction / outgoing directors / CEO. This results in reducing multiple applications and points of contact for the applicants and improves application and action traceability for both the applicant and the back-end teams. Change Type Change Impact Process Reference ► Automating back-end examination check(s) ► Enhanced user experience 4.1 (1.5) ► Automating application approval routing ► Reduced back-end effort BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 23 ► Improved Traceability Existing practice Proposed practice Regulatory Implication Licensed entities (NBFCs, Insurance, Capital Markets), have a Under the proposed design, licensed entities will be automatically identified None restricted entity type based on the license (e.g., an Asset at the time of submission of the conversion of status application based on the Management company can only operate as a public company and is identified business object of the entity. The system shall automatically display restricted from converting to a private company or an SMC)*. only the allowed conversion options based on the type of license (e.g., a Currently, that check is performed manually by the back-end public Asset Management company won’t be given the option to convert to a examination teams. private company)*. Additionally, if there is a change in the directors / CEO of certain If there is a change in the Directors / CEO of certain licensed entities (NBFCs, licensed entities (NBFCs, Insurance), it requires ‘Fit and Proper’ Insurance), the application form shall require all relevant fields and examination from the concerned licensing department for the new attachments needed for the appointment of Directors / CEO of the licensed Directors/CEO. Currently, that examination is conducted outside of entities. The system shall automatically route the application to the complete the current e-services system and the CRO teams either route the approving hierarchy of the licensing department for ‘Fit and Proper’ request manually (i.e., through emails) to the concerned licensing examination and approval, before allocating it to the Dealing Officer (DO). department or request the applicant to obtain a prior approval from This shall significantly enhance the user experience of licensed entities at the the concerned licensing department manually. The examination time of conversion by requiring all relevant information at once and shall also teams of the licensing department then require additional information improve internal traceability and actions on the applications. in respect of the newly appointed persons from the applicants, resulting in an inefficient and difficult-to-track mechanism. *Complete list given in section 2 of Volume 1. To enhance the user experience, customized display and fields of entry have been designed in the conversion application, based on the specific requirements of the entity at the time of conversion. Currently, up to 4 different legal forms (Conversion, Alteration in Share Capital, Allotment of Shares, and Change in Directors / Officers) can be applicable at 3 the time of conversion, based on specific scenarios. The current interface displays all these forms together under 1 application, creating a non-customized application display which can be difficult to navigate and comprehend for the users. In the redesigned process flow, only fields that are relevant and applicable shall be displayed, based on input obtained from the user (e.g., if the user input indicates that there is no new allotment of shares, the fields required in case of allotment of shares won’t be displayed). Change Type Change Impact Process Reference ► Customizing fields of entry to user requirements ► Enhanced User Experience 4.1 (Scenario 01) Existing practice Proposed practice Regulatory Implication At the time of conversion of entities from one type to another (e.g., Under the redesigned display of the conversion application*, only fields that None Public to Private company, Private to SMC etc.), there is often a are relevant to the specific scenario shall be displayed to the users. The change in the Directors / CEO, alteration of the share capital, and/or system shall be configured to automatically display the relevant fields to the change in shareholding or membership or voting rights of the entity. applicants based on inputs by the user to trigger the specific requirements in Currently, following additional forms are generated within the case of Alteration in Share Capital, Allotment of Shares, and/or Change in conversion application* in the e-services regardless of the Directors / Officers. applicability: For example, in case there is a change in the Directors / CEO of the entity but ► Form 9 - Particulars of directors and officers, including the chief the user marks that there is no new allotment of shares, only the fields for executive, secretary, chief financial officer, auditors, legal change in the Directors / CEO of the entity shall be displayed to the user in adviser and in case of single member company, nominee of sole the conversion application (along with the other mandatory fields of the member or of any change therein conversion application* and the special resolution). BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 24 ► Form 7 - Notice of alteration in share capital The customized display can significantly enhance the user experience of ► Form 3 - Return of allotment of shares & change of shareholding converting entities by creating an easy to navigate application form. or membership or voting rights Since all the fields of the above forms (including the mandatory requirements of the conversion application* and the special resolution) are available within a single, long form, it can be difficult to navigate and comprehend for the users, particularly in scenarios where these fields are not applicable. *The Companies Regulations 2022 have removed the requirement of filing of a conversion application for upward conversions (such as SMC to Private, Private to Public etc.), and have removed the standardized form for downward conversions (such as Private to SMC, Public to Private etc.), even though an application is still required to be filed. However, a copy of the amended memorandum and articles of association and special resolution, along with all applicable forms of Alteration in Share Capital, Allotment of Shares, and/or Change in Directors / Officers (Form 3, Form 7 and Form 9, as the case maybe) are still required to be submitted. BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 25 B. To-be process flow and business requirements All above mentioned activities are performed in the LEAP system by the respective users. BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 26 Online submission Step # User User Action 1.1 Applicant Login as an authentic user - Refer to Common Process Repository (CPR) 1.2 Applicant Service Selection User / System Interaction or System actions: Applicant shall select the relevant option from the listed services. Refer process 4.1.1. Exception & Journey: Upon successful login of the applicant the applicant shall be able to select the relevant option from list of services. 1.3 Applicant Fill and submit application User / System Interaction or System actions: Refer process 4.1.2 Exception & Journey: N/A 1.4 Applicant Fee payment and verification - Refer to CPR 1.5 N/A Performed by the system User / System Interaction or System actions: The system shall automatically identify at the time of login whether the application is of licensed entity or not. In case of change of directors /CEO of licensed entity, the system shall automatically assign the application to POC Licensing Department to conduct Fit and Proper examination of new added directors / CEO. The Fit and proper examination shall be applicable for following specialized businesses: Sr. No. Nature of specialized business Change of Directors/CEO and Officers Capital Markets 1 Securities brokers  2 Futures brokers  3 Debt Securities trustees  4 Security advisers & Futures advisers  5 Share Registrars & Balloters  6 Underwriters  7 Research Entities / Analyst  8 Consultant to the Issue  Non-banking finance companies (NBFCs) 9 Leasing companies (without deposit taking)  10 Investment finance (without deposit taking)  11 Housing finance (without deposit taking)  12 PE and VC fund management  Insurance Companies 13 Insurance Brokers  14 Surveyor  15 Third Party Administration. (TPA) for Health Insurance  16 Re-Insurance Brokers  BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 27 Step # User User Action Exception & Journey: In case of non-licensed entity, the system shall allocate the application to concerned DO CRO. Link to step 1.7. 1.6 POC/HOD Licensing Department Fit and proper assessment for additional Directors/CEO User / System Interaction or System actions: Refer process 4.1.2 of Volume 04. Exception & Journey: N/A 1.7 Dealing Officer (CRO) Assignment to DO CRO for examination User / System Interaction or System actions: The system shall assign the application to concerned DO CRO for examination. The DO CRO shall examine the application. Refer to 4.1.3. Exception & Journey: N/A 1.8 Dealing Officer (CRO) Decide whether there are any objections that require issue resolution with the applicant User / System Interaction or System actions: The DO CRO shall have two options: To forward application for CROI approval (in case of no objection that requires issue resolution with the applicant, refer process 4.1.3.1 step 1.9) Procced with generation of objection letter (in case of objection that requires issue resolution with the applicant, refer process 4.1.3.1 step 1.12) Exception & Journey: N/A 1.9 CRO In-charge Review and decided by CROI – Refer to CPR 1.10 Dealing Officer (CRO) Dispose off the application as per CROI’s decision User / System Interaction or System actions: Based on CROI’s decision, the system shall display following options to DO CRO: Approve Reject Exception & Journey: N/A 1.11 N/A Performed by system User / System Interaction or System actions: Upon selection of approve/reject option by concerned DO, system shall intimate the applicant via Email / SMS. Exception & Journey: N/A 1.12 Applicant Provide Feedback User / System Interaction or System actions: The system shall share a link to the applicant to provide his feedback over the process, in an email sharing the relevant certificates. How do you rate you experience on the service? Any Comment: _________________________________ (optional) Exception & Journey: N/A 1.13 N/A Performed by system User / System Interaction or System actions: Upon selection of “Approve” option by DO CRO, the system shall issue acknowledgement, order and relevant certificate. For details of certificates, refer process 4.1.3.2 (1.4) BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 28 Step # User User Action Exception & Journey: N/A 1.14 N/A Performed by system User / System Interaction or System actions: The system shall update the record of the company based on the converted status. Exception & Journey: N/A 1.15 N/A Performed by system User / System Interaction or System actions: Upon selection of “Object” option by concerned DO (CRO), system shall share objection letter via email & intimate the applicant via Email / SMS. The applicant shall provide the requested information for re-examination of concerned DO CRO. Link to step 1.7. Exception & Journey: N/A Offline submission Step # User User Action 1.16 Applicant Submit manual application and pay fee – Refer CPR 1.17 Front Desk Officer Diary Entry of the respective application and documents – Refer CPR 1.18 Data Entry Officer (DEO) Data entry of respective application – Refer CPR 1.19 N/A Fee verification – Refer CPR 4.1.1 Service selection All above mentioned activities are performed in the LEAP system by the respective users. Step # User User Action 1.1 Applicant Select the respective company User / System Interaction or System actions: The applicant shall select the respective company from the list of companies. BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 29 Step # User User Action Exception & Journey: N/A 1.2 N/A Performed by the system User / System Interaction or System actions: The system shall display the Company profile. For company profile, refer Annexure C. Exception & Journey: N/A 1.3 Applicant Select Dashboard from Company Profile User / System Interaction or System actions: The system shall display the following options on the Company's Dashboard: Conversion of Status Change of Status Mergers & Amalgamations Closure of company Exception & Journey: N/A 1.4 Applicant Select relevant process from the Dashboard User / System Interaction or System actions: The applicant shall select the relevant process from the following options appearing on the dashboard: Conversion of Status Change of Status Mergers & Amalgamation Closure of company Exception & Journey: N/A 1.5 N/A Performed by system User / System Interaction or System actions: Display process information page consisting following information for applicant guidance pertaining to the selected process: Overview Basic requirements Fee structure Steps of the process Mandatory documentary requirements Turn over Time of process Pre-defined formats of required declarations / affidavits / certificates The system shall also display following two options on this page: Proceed Back Exception & Journey: N/A 1.6 Applicant Select “Proceed” option User / System Interaction or System actions: N/A Exception & Journey: If applicant selects “Back” option, system shall display the previous interface. Refer to (1.4) BPR 2 - Volume 6 – Conversion of Status (Entity type), Mergers & Amalgamations and Closure of Company | 30 Step # User User Action 1.7 N/A Performed by system User / System Interaction or System actions: In case of conversion of status (entity type), the system shall not display the current status of the company to the applicant. Once the applicant proceeds, the system shall display the following options to select from: Conversion of Status (Entity type) Type of company Applicable/Available options Please select the relevant box (radio button) Single Member Company From SMC to Private Company (Unlimited) From SMC to Private company (Limited by shares) From SMC to Public Limited Company Private Company From Private company (unlimited) to SMC From Private company (limited by shares) to SMC From Private company to LLP From Private company (limited by shares) to Private company (unlimited) From Private company (unlimited) to Private company (limited by shares) From Private company to Public (Unlimited) From Private company to Public (Limited by shares) Public Company From Public to SMC From Public to Private Company (Unlimited) From Public to Private Company (limited by shares) In case of Licensed companies, the following options shall be available for conversion from one type to another: Private Public Sr. Nature of specialized business SMC Company Company Capital markets 1 Securities brokers    2 Futures brokers    3 Debt Securities trustees    4 Security advisers & Futures advisers    5 Share Registrars & Balloters    6 Underwriters   ?

SECP BPR 2 Volume 6: Conversions, Mergers & Closure PDF

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