Secretary Finance Dr Waqar Masood has said the demutualization of stock exchanges is in the process to attract the strategic investors, which does not mean closure of Lahore and Islamabad Stock Exchanges. Secretary Finance also clarified his remarks about stock exchanges in a meeting of Senate Standing Committee on Finance Wednesday. Waqar Masood further stated that his remarks about stock exchanges have been misunderstood by the media.
"Demutualization will be done in all the three stock exchanges, which would lead to their integration. This would be very helpful for the investors," he exclusively told Business Recorder after the committee meeting. The Senate Standing Committee on Finance has constituted a two-member sub-committee with Senator Rafique Rajwana and Usman Saifullah to suggest amendments after examining the draft Securities Act proposed by the SECP. The meeting was informed that amendment in the Securities and Exchanges Ordinance, 1969 have been proposed to effectively handle the major shortcomings as there are no provisions in the existing law for duties of securities exchange. The existing law does not provide a system audit of stock exchanges, powers of intervention of the SECP for investors'' protection, the regulation of clearing houses and eligibility criteria for a clearing house and a depository. Additionally, there are no provisions in the current law for handling investors'' complaints, code of business conduct and financial resources of regulated persons.
The committee was also informed that the draft Securities Act 2015 consists of fifteen parts and one schedule and has provisions to effectively deal with licensing requirements, eligibility, duties suspension or cancellation of licence and audit as well as special audit and even has the powers to takeover. The law also delegates powers to SECP for taking disciplinary action against licensed person and impose penalties, etc.
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