Senate Standing Committee on Finance has deferred approval of a bill designed to amend the Stock Exchanges Demutualization Act 2012 for extension in restriction period for issuance of the Trading Right Entitlement (TRE) certificates by stock exchanges for two days to allow re-vetting of law by authorities and to remove ambiguity during extension dates.
The meeting of Senate Finance Committee chaired by Saleem Mandviwalla on Tuesday was informed by the Secretary Finance Dr Waqar Masood that the proposed extensions in dates are meant to cover the delay in implementation of the Act; and it is not meant to benefit anyone. "Changes of dates are not going to benefit any stakeholders," he said with a view to convincing the committee, which was reluctant to clear the law. Dr Waqar Masood wanted the Chairman Securities Exchange Commission of Pakistan (SECP) to assure the committee that the implementation would be completed within the proposed dates for an amendment.
An SECP official said that the date of 2010, pertaining to issuance of new TRE certificates, has not been applied and consequently became redundant. The issuance of TRE certificates was part of the entire package of the demutualization and integration of stock exchanges.
He said the major work of the demutualization of stock exchanges has been completed and now the remaining part of the package would be implemented within the proposed extended timeframe. Amendments were proposed in the Section 16 of the Demutualization Act that provides for a moratorium period for issuance of the TRE certificates. The dates referred to in section 16 were drafted in 2008 but the Act was passed in year 2012 and amendment bill seeks to enhance the dates provided in section 16.
As per existing provision (4) of section 16, a stock exchange is debarred to issue new Trading Right Entitlement certificate until June 30, 2010. Now, the same has been proposed to read December 31, 2017. Similarly, in terms of section 16 (5) after June 30, 2010 till December 31, 2019, a stock exchange would offer for issuance fifteen TRE certificates each year in the prescribed manner and the same was proposed to be substituted with December, 31 2017 till December 31, 2026. In terms of section 16(6) it is provided that after 2019 there will be no restriction on Issuance of TRE, the same has been proposed to be substituted to December 31, 2026.
The meeting was informed that the Stock Exchanges (Corporatization, Demutualization and Integration) Act, 2012 was promulgated in 2012 provides for the conversion of the existing stock exchanges from limited by guarantee company to limited by shares company as well as for the segregation of the majority ownership of a stock exchange from the right to trade on such stock exchange.
The bill to amend the Stock Exchanges (Corporatization, Demutualization and Integration seeks to extend the moratorium period provided in chapter III of the Act as due period had already lapsed due to delay in promulgation of the Act. In fact the corporatization/demutualization of the stock exchanges was prepared in 2008 and was approved by the National Assembly on October 8, 2009 but it could not be passed from the Senate within time period of ninety days. The same was passed by the Parliament in its joint sitting on March 27, 2012. The committee also deferred draft Corporate Rehabilitation Act to be taken up later in the next meeting.
Talking to media people after attending Senate Standing Committee on Finance meeting, Governor State Bank of Pakistan (SBP) Ashraf Mahmood Wathra said that he is unable to give any figure about withholding tax deductions on banking instruments. He said that the issue of withholding tax is under review. Responding to a question that there is a reduction in transactions through banking channels after imposition of withholding tax on non-filers, he said that there is nothing like that.
Comments
Comments are closed.