Mohammad Ali, Chairman SECP, said on Thursday the SECP has come up with a new mindset of interacting with outside world and seven committees would be finalised next week to deal different areas of capital market. He was speaking to the members of All Pakistan Textile Mills Association (Aptma).
He said the business community was supportive as far as the SECP regulations are concerned. However, he said Pakistan has equity market not capital market. Further, he said Pakistan was also lacking debt capital market and the SECP was working on these areas. Also, he said, two contracts on commodities including cotton and sugar are approved for commodity exchange, which would improve agriculture if approved by the quarters concerned. He said investments are being encouraged through different ways in the country. Also, he added, 97 percent of deposit is in the banking sector. He said the reporting standard in corporate sector should be improved.
He said the rules relating to unlisted public companies are still intact under the original law, therefore, these companies they should ensure compliance to the rules in order to save their skin. He dispelled the impression of policing by the SECP and cleared that the prime role of the SECP is to regulate, which he said is good for corporate sector.
He said all relevant information on different rules and regulations are almost loaded on SECP website. Otherwise, he said anyone can get it by writing to concerned regional office. He said the level of awareness on the part of private sector is a bit low. He said the SECP was aiming for more companies to graduate and get listed with stock exchange. Further, he said, seminars are need of the hour to create awareness.
Chairman Aptma Punjab Ahsan Bashir said the condition of directors' training was not possible to fulfil practically. Also, he mentioned that qualification of corporate secretary is also not possible to meet for smaller companies. According to him, some companies were got delisted simply due to over regulation and too much intervention.
The SECP made clear that there was no requirement of filing minutes of company meetings, as code is all about recommended and not mandatory requirements. It was also mentioned that the SECP does not penalise violation of code. He said a qualified secretary of the company saves cost of the companies therefore it is better to engage a qualified one.
According to him, the SECP was quite lenient towards the corporate sector due to worst loadshedding and only fraudulent activities are being detected and warned. He said the PICG monopoly has been restricted and other institutions can also provide training to directors now. Free of cost training programmes is our target, he added.
He said time has also come to look into Companies Ordinance, 1984, as the present version is old one. He said efforts are underway to differentiate the types of companies. He said the private companies would soon be able to inspect their filing soon with half fee. He mentioned no one from the business community has ever written the SECP about their complaints on rules and regulations.
Gohar appreciated efforts of Muhammad Ali as Chairman SECP. He said capital market was not savvy to private sector, as neither products nor a drive from capital market has ever been made to attract the industry to get listed. Responding his worries, Chairman SECP said visionary people are not placed accordingly. He said 94 percent funds are lying with banks, as we have created nothing but banks with spread of eight percent that is nowhere in the world.
Resultantly, he said entrepreneurship is over in Pakistan and the banks only give money to people with money. It is nowhere in the outside world. He said there is an urgent need to create competition among banks to promote commercial banking along with investment banking. Also, he said there is need to create debt capital market, He said some 90 million people in Pakistan are in between 17 to 27 years of age and there is no access to capital in the country.
There is a strong need to bridge the gap of money and talent, he asserted.He said rationalising tax regime is also important to make them practical, as tax rate should be of the nature that people should be encouraged to pay. He said there is a need to look at whole financial landscape of the country besides educating the people to come into capital market. "We don't have capital market, we have stock market," he said, adding: "We have to let the businessman make money and the solution lies in the development of capital market."