Certificates of Musharika (COMs)
Oct 22 - 28, 2001
Major features of the COM Scheme are given below:
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Registered
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A unique registration number shall be assigned to each certificate
upon issue.
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Maturity
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Available in tenors of three months, six months, one year, two years,
three years, four years and five years.
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Currency:
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Pakistan Rupees only.
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Denominations |
Minimum denominations of Rs. 5,000 |
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Investment Limit |
A minimum investment of Rs. 10,000 |
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Expected returns* |
3 months |
7.00%
per annum |
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6 months |
8.00% per annum |
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1 year |
10.00% per annum |
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2 years |
11.00% per annum |
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3 years |
12.50% per annum |
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4 years |
12.75% per annum |
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5 years |
13.00%
per annum |
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* subject to change. |
Profit payments are made on a quarterly basis. |
|
Profit Calculation |
Profit rates to be computed on a 365 days
basis and paid for the actual number of days the certificate
remains outstanding within the relevant profit payment
quarter. |
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Premature Encashment |
Permitted at any time. A redemption reserve
fund equal to 5% of the face value of COMs outstanding has to
be maintained by FGM to cater to premature encashments. |
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Penalty |
1 % of encashment value. |
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Transferable |
Yes. |
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Taxation/Zakat/Stamp
duty |
Subject to 2.5% Zakat and withholding tax 10%
wherever applicable. Stamp duty 0.15% of face value on issue
and 0.10% on transfers. |
|
Profit Payment Mode |
By crossed cheque/ direct account transfer for
SCGB/SCB account holders. |
Standard Chartered Group and First Grindlays
Modaraba (FGM)
The Standard Chartered Group is a London based
international bank, focused on emerging markets of Asia, the Middle
East, Africa and Latin America, with a network of over 600 offices in
more than 56 countries and assets of approximately USD 90 billion. In
Pakistan, the Group comprises of Standard Chartered Bank and Standard
Chartered Grindlays Bank, the largest foreign banking group of the
country, with a total 21 branches nationwide. The Standard Chartered
Group has 100% management control of FGM which is one of the largest
leasing entities in the country with gross leased assets of over Rs.
3.5 billion. FGM maintains the highest entity rating in the modaraba
sector of A2 which signifies a modaraba in outstanding financial
condition with a consistent record of above average performance.
COM scheme of FGM has been formulated within
parameters laid down by the Religious Board and has been specifically
approved by the Securities and Exchange Commission of Pakistan. These
certificates are similar to certificates of investments of leasing
companies with maturities ranging from 3 months to 5 years. For only
Rs.10,000 you can invest in COMs directly from FGM or across 21
Standard Chartered Bank (SCB) or Standard Chartered Grindlays Bank (SCGB)
branches without even opening an account. COMs pay profits quarterly
and the certificate is transferable and encashable at any time. These
transfer and encashable features are similar to those found in shares
of a company and make COMs extremely liquid.
A certain percentage of total profits (stated on
the face of each certificate) is shared by FGM's certificate holders
(shareholders) and the COM holders. The profit (and also the encashed/matured
principle) can be credited to any SCB or SCGB account on a quarterly
basis or if the investor does not have an account with these banks the
profit cheque is delivered to the investor's address.
The COM scheme affords many safeguards to its
investors like, disclosure of credit rating on all offer for sale and
advertising materials, publication of quarterly profit and loss
account in two national dailies for the information of COM holders,
premature encashment at any time, appointment of a Trustee (A.F.Fergusons
& Co.) to oversee the use of a Redemption Reserve Fund created for
premature encashment and strict reporting requirement of the SECP.
FGM's web site (www.grindlays modaraba.com)
contains inter-alia, full terms and conditions of the COM scheme.
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