The federal cabinet has approved extension in service of Chairman Securities and Exchange Commission of Pakistan (SECP) Aamir Khan for another three years.
This is the first in the history of SECP that a sitting chairman has been awarded an extension. Prime Minister Imran Khan first appointed Aamir Khan as Commissioner SECP in December 2018 and he was later elevated as Chairman in August 2019.
Advisor to the Prime Minister on Finance and Revenue Shaukat Tarin apprised the federal cabinet of the reforms, featuring legal, structural, regulatory, operational and product development initiatives, by SECP in the last three years. The reforms have been envisioned to further the government’s vision of improving ease of doing business, expanding financial inclusion, digitizing corporate processes, developing the capital market, and strengthening enforcement of laws.
SECP has achieved end-to-end digitalization of the company registration process, which has resulted in nearly 60% growth in the number of registered companies over the past three years, accumulating to 156,000 companies as of November 30, 2021, from 93,000 in December 2018, according to an SECP report.
In order to simplify, speed up and make enforcement and supervision effective, SECP has separated the functions of Supervision and Adjudication, by establishing two centralized autonomous divisions. All the SOPs and processes related to the initiation and conclusion of regulatory enforcement actions were revamped for ensuring independent adjudication and supervision.
SECP in collaboration with the Pakistan Stock Exchange (PSX) has introduced an alternative board, the Growth Enterprise Market (GEM) to encourage smaller companies to list equity securities and avail the benefits of listing at the exchange. The first SME was successfully listed at the GEM Board last week.
The commission introduced the electronic-IPO system in coordination with the Central Depository Company of Pakistan Limited (CDC). Through the said system investor(s) can submit IPO applications electronically and make subscription payments through e-banking channels. The simplification of the IPO process resulted in eight equity- and two debt-IPO issues that took place during the year. The companies have raised Rs. 56 billion through IPOs in 2020-21, the highest in the last 10 years. In addition, the highest number of companies listed during the year as compared to the last 5 years.
Moreover, SECP introduced Exchange Trade Funds (ETFs) in the capital market, for which the definition of investment advisory services was amended to enable brokers to launch low-cost ETFs. PSX has successfully launched two Exchange-Traded Fund’s (ETF), which will uplift the investor base in the capital market by providing a new, low cost and well-diversified investment avenue for the investors.
For enhancing the ease of doing business and strengthening market participants, measures have been taken to reduce market costs for which the fee structure of the PSX, CDC and NCCPL have been rationalized. In order to enhance investor outreach, a framework has been stipulated for enabling online account opening. To increase the retail base, a simplified account opening process has been introduced for low-risk investors whereby the maximum investment limit of the Sahulat Account has been enhanced from Rs. 500,000 to Rs. 800,000. These steps resulted in an increase of 14,000 new investors witnessed at PSX.
Furthermore, SECP is in the process of implementing the new trading engine at PSX which will improve trading operations of the stock market, but also lead to a much stronger surveillance system of the front-end regulator by December 2021.
Yet another milestone toward improving financial inclusion, growth of the private sector, the launch of Secured Transactions Registry (STR). The STR will be used for the registration of security interests/charges created by entities other than companies on their movable assets such as receivables, intellectual property, inventory, agricultural products, petroleum or minerals, motor vehicles, etc.
Moreover, SECP’s regime for regulated financial institutions has been rated as largely compliant in FATF action plan (08 out 08 action items) and in the Post Observation Period Report of the Mutual Evaluation Report (54 out of 54 recommended actions), as a result of these reforms undertaken by SECP.
To promote documentation and corporate investment in the real estate sector, SECP has amended the Real Estate Investment Trust (REIT) regulations, triggering a number of REIT management license requests and REIT schemes applications. Moreover, to provide ease of doing business to startups, private companies and SMEs were permitted to raise capital by receiving immovable property, intangible assets and services, instead of only cash and were allowed to offer employee stock option plans to employees.
Moreover, SECP eServices is integrated with the Federal Board of Revenue (FBR) and the Employees Old-Age Benefits Institution (EOBI) at the federal level and with business registration portals of Punjab and Sindh at the provincial level, according to the SECP report.
Source: Pro Pakistani