The Securities and Exchange Commission of Pakistan (SECP) has said that some of the more important developments that have contributed to exceptional performance of Pakistani stock market during 2015-16 are stable political environment, induction of Pakistan Stock Exchange into Emerging Market Index, Investment projects backed by China and improving security.
In its annual report 2016, the SECP has highlighted the successful integration of the three stock exchanges of the country into one Pakistan Stock Exchange (PSX) and the formulation of the Capital Market Development Plan (2016-18). During 2015-16, the SECP has been successful in getting 24 legislations approved either from the Parliament or in the shape of Ordinances from the government. These include the Futures Market Act, 2016, SECP Act 2016, Stock Exchanges Act 2015, Corporate Rehabilitation Bill 2016 and amendments in Modarba Companies Ordinance. At the same time there are 32 legislations both laws and amendments in existing laws under process at various stages.
"These statutes were drafted in light of the recommendations of the International Organisation of Securities Commissions (IOSCO), which sets the standards in securities markets regulation," Chairman SECP Zafar Hijazi said. He added, "Today the SECP is able and determined to match any foreign regulatory regime." In his message, the Chairman SECP has added that the Futures Market Act, 2016, will lead to effective regulation of the futures market and result in a number of economic benefits. "Increased activity in the futures market of agricultural commodities will benefit the domestic agricultural sector," Hijazi said. About Capital market, the SECP report has said that the significant development of the year was the integration of Karachi, Lahore and Islamabad Stock Exchanges into a single a unified national level trading platform under the name of Pakistan Stock Exchange Limited (PSX). The SECP has said that the divestment of PSX shares is expected to be completed next financial year, while it was added that Pakistan was successfully upgraded from the Morgan Stanley Capital International's Frontier Markets to Emerging Markets. The comprehensive Capital Market Development Plan (2016-18) has been formulised outlining the future roadmap for the capital market, including reforms for issuers and capital market intermediaries, reforms for product and market development and reforms for investors' awareness and facilitation. Regarding commodities market the Commission has said that during the year, the trading volume at the Pakistan Mercantile Exchange (PMEX) showed substantial growth as a total of 3.8 million commodity futures contracts with a value of Rs1.295 trillion were traded as compared to the traded value of Rs701 billion in fiscal 2014-15. The SECP has said that proactive approach with regard to regulation and development of the corporate sector was adopted in the year, and company registrations saw a healthy growth. In order to bring the regulation of corporate sector on a par with international jurisdictions and implement the best business practices, rules and regulations of a number of jurisdictions were studied. The unnecessary requirements are being abolished and the defects of the existing law are being removed, the SECP has said. The proposed law is particularly encouraging for new entrepreneurs. In order to facilitate corporate growth, a Company Registration Office has been opened in Gilgit Baltistan, while a similar office will be set up in Sialkot. The other key achievements made by the SECP in fiscal year 2015-16 include reforms in Insurance sector, implementation of Urdu language. Among the future plans the SECP has said that developing a derivatives' market was the top priority. The financial results of the SECP for the year 2015-16 show surplus of income over expenditure after tax Rs254 million as against last year's surplus of Rs203 million, with an increase of Rs51 million over the last year. The total revenues for the financial year 2015-16 are Rs2.67 billion which are higher by Rs192 million as compared to last year's revenue of Rs2.48 billion, report added.