The Securities Exchange Commission of Pakistan (SECP) has released its annual report which covers detail performance and audited financial statements of the SECP for the period from July 1, 2014 to June 30, 2015.
In his message written for the Annual Report 2002, the SECP Chairman Zafar Hijazi sums up many of the actions that the commission attributes as its achievements. He stated that he firmly believe that only a strong SECP operating in an independent environment can guarantee a stable capital market and thus contribute to the development of national economy.
He said that the agreement among the three stock exchanges to integrate to form one national level stock exchange is a very significant achievement having the potential to turnaround Pakistan's capital market.
He also noted the government's decision to gradually reduce the corporate tax rate from 35 percent to 30 percent is bold and will have far reaching economic impacts.
The report details steps taken to enhance the regulatory enforcement capacity of the commission which had resulted in better monitoring of the capital market, non-banking financial companies, insurance and the overall corporate sector.
During the year, the SECP has made significant improvement with regard to compliance with the International Organisation of Securities Commission (IOSCO) benchmark principles of securities regulation.
The compliance rate has gone up from 37 percent in 2004 to 62 percent in 2015 and efforts are underway for achieving enhanced compliance with those principles which are as yet not fully compliant.
Moreover, in pursuance of the government's National Action Plan to end terrorism and to halt financing sources of terrorists, the SECP decided to revalidate the licenses of all non-profit organisations or NGOs registered with the SECP in order to ensure that no transgressions have taken place.
Investor protection is the foundation of the SECP's reforms programme, and it is our top priority. The introduction of direct settlement service mechanism at the CDC and NCCPL are significant steps in this direction.
This will prevent unauthorised use of clients' securities by broker participants. Investor account holders at the CDC were provided an online transaction facility for movement of securities.
One of our major successes this year has been the promulgation of the new Securities Act that came into effect in May 2015. Besides addressing various shortcomings of the 1969 ordinance, the new law incorporates IOSCO benchmarks and contains provisions for promoting public confidence in the market, including full disclosure at the time of the initial offering, continuous disclosure requirements and an inclusive compliance regime.
In order to bring the initial public offering (IPO) process on a par with the developed markets, revised regulations for book building have been enforced to ensure a user-friendly and transparent model, which also provides investors with an opportunity to participate in the process electronically. Secondly, in order to attract new listings, the existing manual procedures for listings have been simplified.
Regulatory amendments were approved to change exchanges' pre-open modalities to curb manipulation during pre-open session.
In pursuance of Section 25 of SECP Act 1997, the annual report has also been submitted to the federal government, which will subsequently present it in the National Assembly of Pakistan. The SECP's annual report is made available on the SECP's website www.secp.gov.pk.-PR