Mr. Ashraf Bava is the Chief Executive of Nael Capital (Private) Limited, a corporate member of Pakistan Stock Exchange. He became the CEO of Elixir in 2005 and has served on the Board of Karachi Stock Exchange Guarantee (Ltd.) and National Clearing Company of Pakistan (Pvt) Ltd. As part of his volunteer work, he is serving as the President and Advocacy Chair of the CFA Society of Pakistan since October 2013.
Mr. Thomas Ma is the CFA Institute Director of Government and Regulator Relations, responsible for researching existing and emerging regulatory practice frameworks and accreditation schemes in Asia Pacific. He leads efforts in the region to explore and obtain waivers and recognition opportunities for CFA Institute credentials as well as increase awareness of their professional development programs among regulators, universities, and professional organisations. He is a member of the American Institute of Certified Public Accountants and Hong Kong Institute of Certified Public Accountants. He is a certified Financial Risk Manager (FRM) and a CFA charter holder.
<B>BR Research: Tell us about the CFA Institute and what is your engagement with the SECP?</B>
<B>Thomas Ma:</B> CFA Institute is a global not-for-profit investment education and professional organisation with offices in the United States, United Kingdom, Belgium, Hong Kong, Beijing and Mumbai. We are the leading voice for developing and setting the highest educational and professional standards in the investment industry.
We have over 135,000 members around the world. In Pakistan, we have 250 active members and every year we have over 1,500 candidates take our CFA program exam in Karachi and Lahore.
Our goal is to serve the interests of investors for the ultimate benefit of society. There's a trust issue between investors and professionals after the financial crisis of 2008. Since then, we've been promoting the 'Putting Investors First' initiative globally by educating investors about what they need to know when they hire investment managers and financial advisers to manage their money. CFA charterholders have made the commitment to put investors first.
Together with CFA Society Pakistan, we want to work with the SECP to promote the Statement of Investment Rights in Pakistan. It is simply ten rights that any investor should expect from their financial service providers. For example, you should expect your financial advisers to be honest, independent, and put your interests above the firm's.
Today, the SECP and CFA Society Pakistan will sign an MOU to jointly raise awareness of investor rights in the country. It sets the framework to promote these 10 simple statements through newspapers, websites, seminars, so the investing public can learn and know their rights.
<B>BRR: How successful has the program been?</B>
<B>TM:</B> We have been doing this around the world for the past few years. Last May, over 85,000 CFA Institute members participated in local events that called attention to the needs and rights of investors.
Investors around the world are asking more questions and demanding more from their investment management professionals. We have heard investors asking their financial advisers: "Can you explain to me my rights?" before they sign contracts. In markets like Hong Kong, financial advisers are required to explain to investors their rights and people are required to sign an agreement confirming that they understand their rights before making investment decisions.
<B>BRR: How can the gap between public and private equity be reduced? What is CFA doing in this regard?</B>
<B>TM:</B> This is an important question in particular for emerging markets such as Pakistan. In developed markets, over 80 percent of equities are managed by institutional investors. But when it comes to emerging markets it is the other way round - most retail investors are managing their own money. For retail investors, it may not be in their best interest to do so because they may not have the necessary skills and experience to compete with the institutional investors. This becomes a big risk for such investors.