As part of its continuous efforts to provide conducive business environment for sustainable development of NBF Sector and Capital Markets, SECP with the support of USAID is holding conference on "Non-bank financial sector and Capital Markets". This conference is part of our continuous efforts to improve overall business environment through consultative process. The conference would provide a platform to the policy makers, international experts and industry players to debate the challenges faced by our Non-Bank Financial Sector and Capital Markets and suggest a way forward, duly considering the local dynamics and international best practices.
SECP has long emphasised the role of vibrant NBF sector which would not only promote savings by offering different asset classes to the investors but will also provide alternative fund raising opportunities to the participants of financial system.
Despite being part of the country's regulated financial sector for the last more than 15 years, Non-Bank Financial Sector, on over all basis, has not been able to make the requisite contribution to complement our financial system. Although, mutual fund industry has experienced a considerable growth in terms of assets under management, however, it has not yet been successful in attracting the requisite retail investors' participation. The high level of participation of the public and retail investors is imperative for the sustainable growth of the mutual fund industry.
With the objective of facilitating growth of NBF Sector, SECP has recently introduced major reforms in the regulatory framework. The concept of small and mid-sized unlisted non-deposit taking lending NBFCs with significantly reduced equity requirements has been introduced. The existing companies other than NBFCs have been allowed to apply for license to carry out lending activities subject to prescribed eligibility criteria. Further, a new class of NBFC ie Non-Bank Micro Finance Companies has been introduced which will enable the Commission to regulate non-bank micro finance institutions. It is expected that these regulatory reforms will stimulate growth of this sector in the years to come.
SECP is constantly striving to promote investment in the country. Recently, Pakistan Stock Exchange, an integrated and unified stock exchange in the country has been inaugurated. The creation of Pakistan Stock Exchange will go a long way in defining the future landscape of our capital markets.
With the objective to expand the outreach of capital markets and NBF Sector, SECP has encouraged stakeholders to establish capital market business hubs in various small cities, first of which has been established in Abbottabad. At the same time, SECP has launched a web portal for investor education named "Jama punji" to facilitate investors to make well informed decision.
However, regulatory measures only provide a conducive environment, while real thrust should come from the market participants. The market participants need to look at regional and international best practices by offering suitable, cost-effective products and giving investors the "fair deal" so that full potential of NBF Sector is fully explored. This conference is a part of our continuous consultative process which will benefit all stake holders including market participants and the regulator. SECP will definitely consider the workable suggestions presented by the international and local participants of the conference.
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