Jan. 20, 2009 – KARACHI: The Karachi Stock Exchange has made amendments to the listing regulations regarding transfer pricing and corporate governance. According to the KSE, the management had already sought permission from the Securities and Exchange Commission of Pakistan for these amendments.
According to the amendments, Chapter XII captioned Transfer Pricing and Regulation 38 (1) to (11) thereunder have been deleted while in Chapter XI captioned Code of Corporate Governance after sub-regulation (xiii) of Regulation 37, a new sub-regulation (xiii a) have been added.
Under the new sub-regulation (xiii a), all companies registered under the Companies Ordinance, 1984 will place before the board of director all the transactions with the related parties for review and approval. Similarly, the detail of all related party transactions shall be placed before the audit committee of the company under the sub-regulation (xiii a).
The board of directors of a company shall approve the pricing methods for related party transactions that were made on the terms equivalent to those that prevail in arms length transaction only if such terms can be substantiated.
Every company shall maintain a party-wise record of transactions in each financial year entered into with related parties in that year along with all such documents and explanations.