The Securities and Exchange Commission of Pakistan (SECP) has constituted a dedicated divestment committee to ensure the sale of Pakistan Stock Exchange (PSX) shares. According to the future roadmap of the SECP specified in commissions'' annual report for 2016, an all-out effort will be made for the divestment of PSX shares. A dedicated divestment committee has been constituted to ensure the sale of PSX shares.
Moreover, in order to achieve the objective of good governance, the SECP is pursuing critical governance reforms such as strengthening and reconstitution of the boards of directors of PSX, Central Depository Company (CDC) and National Clearing Company of Pakistan Limited (NCCPL), their internal committees and limits on their shareholding etc.
The SECP''s future reform agenda will encompass key governance, transparency, market and product development and risk management reforms. The commission said that many new rules and regulations would be framed under the Securities Act, 2015, and the Futures Market Act, 2016. These include rules and regulations for licensing, conduct, financial resource and other aspects of the licensed entities and regulated persons such as securities exchanges, futures exchanges, clearing houses, securities and futures advisers, futures brokers, securities managers and accredited representatives of the regulated persons.
The establishment of a federal level brokers'' association is also a new initiative. The association will act as a self-regulatory organisation in terms of compliance and regulatory oversight for the brokerage industry and will ensure professional training and exposure to the brokers.
In order to meet the international regulatory standards, the SECP will carry out a self-assessment against IOSCO Principle 38 covering financial market infrastructures to further validate the improvements in the practice and regulation of securities market institutions in Pakistan.
The SECP is committed to developing a derivatives'' market. In this regard, trading in stock options would be introduced in order to broaden the scope of trading activity at PSX, provide investors with avenues to develop better investment and hedging strategies and reduce element of speculation in the cash segment.
As investor protection is top priority, the rules and regulations for a centralised customer protection compensation fund are being drafted. The fund will be established as a trust to ensure that the assets of the fund are kept segregated from assets of the securities exchange.
The SECP is also planning to establish a Centralised KYC Organisation (CKO) to ensure that the KYC data used by the CDC, NCCPL, brokers and traders is verified, well maintained and centralised. This will also eliminate duplication in the KYC process. The relevant rules are being finalised. The existing regulatory framework for small and mid-sized non-deposit taking NBFCs is also being reviewed to facilitate and develop the NBF sector, SECP.
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