SECP finalises capital market development plan

The Securities and Exchange Commission of Pakistan (SECP) Saturday finalised a Capital Market Development Plan (CMDP) to provide stock market participants with clarity as to the vision, objectives and initiatives for the capital market.
The CMDP issued by the SECP disclosed that in order to meet the challenges enumerated above, a concerted effort needs to be made on several fronts, ie, creating awareness amongst masses about capital market; ensuring access to and availability and outreach of the capital market infrastructure institutions and products; instituting legal, regulatory, structural and governance reforms for the market, SROs and intermediaries; introducing measures to restore investor confidence through improved compliance and enforcement; and giving incentives to promote corporatisation and listings, to name the most important. Each of these is equally important and needs to be developed/introduced side by side, so that they supplement each other, and cohesively contribute to overcoming the challenges faced by the financial sector of Pakistan in general, and the capital market in particular.
Accelerated efforts are required for increasing financial literacy - educating existing and potential 8 investors about their rights, roles and responsibilities. Targeted awareness campaigns are required for retail investors, policy/decision makers, and pension and insurance sectors. Expanding market outreach is also a major challenge when it comes to investor awareness, which needs to be dealt with by expanding branch network of the market intermediaries, capital market infrastructure institutions and by making use of technological innovations for targeting geographically remote investor base. Also, major initiatives are required to reinforce investor confidence in the market by further improving risk management, governance and transparency and investor protection in the capital market operations. This also calls for implementation of effective ongoing supervision and enforcement mechanisms and compliance processes including enhanced market monitoring and surveillance and inspections. Realizing the need to formulate a comprehensive strategy to meet the challenges faced by the Pakistani capital market, the SECP initiated work on formulating a CMDP outlining strategic objectives and initiatives for coming two years.
The SECP carried out a detailed exercise in consultation with key stakeholders and has formulated a two-year strategic plan. The said plan broadly focuses on introduction of key structural reforms for SROs and intermediaries, revision of existing laws and framing legislations for new products, measures for encouraging new listings and increasing market depth, liquidity and outreach, development of a vibrant debt, derivatives and commodities market, and measures for investor awareness and protection. The CMDP provides market participants with clarity as to the vision, objectives and initiatives for the capital market. The Plan ensures that the Pakistani capital market is well positioned to play its effective role in supporting the overall economic growth and development objectives of the country, while being dynamic enough to meet the challenges of globalization and external competition, the SECP added.