The Securities and Exchange Commission of Pakistan (SECP) will not give relaxation in time frame for de-mutualisation of bourses as specified in Stock Exchanges (De-mutualisation, Corporatisation and Integration) Ordinance 2007.
Addressing the board of directors of the Islamabad Stock Exchange (ISE) here on Thursday, the SECP chairman Razi-ur-Rehman Khan said that the long awaited Ordinance has been finally approved by the federal cabinet and it will be shortly signed and promulgated by the President.
He said that all the three exchanges must comply with all the requirements of the Ordinance for de-mutualisation. He emphasised that the SECP was not going to extend the time frame for complying the provisions of the ordinance by the exchanges.
Earlier, Aftab Ahmad Chaudhry, Managing Director, ISE welcomed the SECP Chairman and gave an outline about the progress made so far with regard to de-mutualisation and Corporatisation of the exchange. The Managing Director ISE assured the SECP Chairman that the exchange would complete the process of de-mutualisation in accordance with the provisions of the Ordinance within the given time frame.
The Chairman SECP said that due to reforms agenda which has been implemented by the SECP with the collaboration and cooperation of stock exchanges, Pakistan''s securities market was being ranked amongst the stock markets of the developed countries. The MD ISE also briefed the chairman about the future strategies of the exchange in the wake of de-mutualisation that the ISE would initially focus to make the local financial institutions its equity partners and a modest chunk of only 10-15 percent equity would instead be offered to the strategic investors being the international stock exchanges/operators.
The SECP Chairman while agreeing to the proposal said that an exchange could only allocate capital to the tune of 40 percent to FIs and within this limit every exchange was free to decide the shareholding composition with no FI getting more than 5 percent equity in any exchange.