Federal Consolidated Fund: SECP proposes deletion of Section 24(3)(A) from SEC Act

The Securities and Exchange Commission of Pakistan (SECP) has proposed amendment in the Securities and Exchange Commission Act, 1997 to bar the commission from remitting surplus to the Federal Consolidated Fund for maintaining its financial autonomy.
Sources said on Monday that the SECP in its budget proposals for 2013-14 proposed deletion of section 24(3)(A) of Securities and Exchange Commission Act, 1997. The SECP said that the remittance of surplus to the Federal Consolidated Fund would create financial crisis for the Commission.
According to the budget proposal, the Commission was established under the Securities and Exchange Commission of Pakistan Act, 1997 and became operational on January 1, 1999. It is functioning as a corporate body to administer the laws relating to capital market, insurance industry and corporate sector. Prior to the establishment of the Commission, this function was assigned to Corporate Law Authority (CLA) which was an attached department of Finance Division. That Authority was abolished simultaneous to the establishment of the Commission ie January 1, 1999. Prime objective of the Federal Government in the transformation of its attached department into Commission was to ensure enforcement of various corporate and securities related laws more effectively and more efficient regulation of capital markets, through a professional body having financial and administrative autonomy.
The Commission meets its expenditure through levy of fees prescribed under various laws administered by it. The Commission administers and control its own fund established under section 23 of the Act to which its income is credited and expenses are charged. Surplus, if any, from year to year is carried forwarded in the Fund for revenue as well as capital expenditure. The Commission has a long way to go for its development and sufficient financial resources are required to achieve this goal. Thus remittance of surplus to the Federal Consolidated Fund would create financial crisis for the Commission. Moreover Commission will also lose its financial autonomy, SECP added.
The existing section 24(3)(A) of Securities and Exchange Commission Act, 1997 said that any surplus of receipts over the actual expenditure in a year, after payment of tax, shall be remitted to the Federal Consolidated Fund and any deficit from the actual expenditure shall be made up by the Federal Government, it added. The above said section be deleted in budget 2013-14, SECP added.