The Securities and Exchange Commission of Pakistan (SECP) has collected Rs 19 million as penalties during 2016-17 which have been deposited in the Federal Consolidated Fund (FCF). According to the SECP Annual Report 2017 on financial position of the commission, the financial results of the SECP for the year 2016-17 show surplus of income over expenditure after tax Rs 416 million as against last year's Rs 254 million, registering an increase of Rs 161 (63%) over the last year. The total revenues (net of levies) for the financial year 2016-17 are Rs 3,048 million which are higher by Rs 374 million (14%) as compared to last year's revenue of Rs 2,675 million.
The total operating expenses for the year under review were Rs 2,482 million, showing an increase of Rs 224 million (10%) over the previous year mainly due to hiring against vacant positions and other operating expenses. Capital expenditures for the year remained within the approved budget for the year. An amount of Rs 19 million received as penalties by the SECP during the current year has been deposited in the Federal Consolidated Fund.
With a contemporary legal framework and a revised structure in place, the SECP has the right platform and momentum to steer Pakistan towards a brighter future. The SECP is all set to achieve the following goals: In the last three years, there have been many legal reforms and the SECP needs to educate its regulated entities by creating awareness about these laws through different forums such as conferences, seminars, media, etc.
The incorporation rate needs to be increased by bringing the unregistered entities in the corporate net thus propelling the economy towards corporatisation. For this purpose, awareness sessions for company representatives and corporate consultants need to be carried out to highlight the amendments to the company law, which has eased the burden on small businesses by cutting costs and reducing the time involved in processing. Furthermore, efforts are also required for introducing tax incentives by the government for encouraging corporatisation.
A strong link needs to be established between the real economy and the capital market to develop the bond market. Moreover, there is a need to introduce products like equity derivatives, interest rate derivatives, agricultural commodity derivatives, electronic warehouse receipt finance, etc. Such products would develop the real economy and increase access to finance and improve price risk management. The SECP needs to support the growth of agricultural produce companies by engaging with all relevant stakeholders to create a comprehensive and modern document framework. This will allow it to play the much needed pivotal role in the development of the entire agriculture value chain.
It is expected that the above measures will aid in growth and employment, documentation of the economy, building a connection between real economy and capital markets and increasing tax revenues. In order to achieve the above, the SECP needs to focus on creation of new departments within the SECP to facilitate horizontal growth, which would help achieve a greater depth of effectiveness in fulfilling the above agenda, meeting the significant needs in terms of technology and manpower capacity building, which is a natural consequence of horizontal growth and a closer interaction with regulated sectors in a proactive and business friendly manner, the SECP added.