The Karachi Stock Exchange (KSE) is likely to agree upon the appointment of non-member as the chairman of the exchange for new year, provided raise in the number of its director in the board, sources said.
According to the sources close to the capital market the board of the exchange unanimously agreed to forward a proposal to the Securities and Exchange Commission of Pakistan (SECP) to raise the number of directors from five to six, four to be appointed by the SECP and one managing director already appointed for the new year, making the total house of 11 directors. It has also been proposed that the new chairman would be appointed from the four outside directors.
"As we have accepted the new mechanism of demutalisation of the stock exchanges of the country, only concern is our rights where stockbrokers community has invested in excess of Rs 15 billion and the valuation of assets are the major concern during this process", the sources said.
"We will be waiting for the reply of the SECP till 4.00 pm Friday as the EOGM is schedule for 4.45 pm, if the demands of board are met, than we would see a smooth sailing during the meeting", they added. The exchange is not opposing the appointment of chairman from the non-member director, unless our participation is raised in the board of directors.
"The stock exchange plans to hold an extraordinary general meeting to seek the approval from stockbrokers. "The exchange will need to amend its rules to appoint a non-stockbroker as chairman, a leading broker said.
An informal meeting was held after stock market regulator on Wednesday and in a statement it announced procedures for ending the practice of appointing stockbrokers as chairmen of its stock exchanges to improve governance and transparency.
On December 9, the regulator proposed the change as part of recommendations by a government-appointed task force that investigated a 25 percent slump in the benchmark index in March.