The privatisation of state-owned entities (SOEs) through capital market as well as financing of infrastructure projects, including post-China Pakistan Economic Corridor (CPEC), and development of debt market are important for development of capital market.
This was stated by Chairman Securities and Exchange Commission of Pakistan (SECP) Furrakh Sabzwari in a presentation given to the National Assembly's Standing Committee on Finance. Additionally, he said that way forward for development of capital markets included: (i) increased capital formation, brokerage consolidation and launch of new products; (iii) launch of infrastructure debt funds to channel private capital for development; (iv) enabling regulatory framework for crowd/alternative funding sources; (v) and robust and enhanced investor education programmes.
The meeting was also told that there has been low trend in listing of new companies in capital market in recent years and new companies listed during the year 2018 declined to 03 from 07 in 2017 whereas no company has been listed yet in 2019. The SECP's focus has been on new listing of the companies as well as improving ranking on ease of doing business index.
The SECP also maintained that the World Bank has also acknowledged that Pakistan made starting a business easier by enhancing the online one-stop registration system, replacing several forms for incorporation with a single application and establishing information exchange between the registry and the tax authority.
The SECP further maintained that the WB also acknowledged that Pakistan made resolving insolvency easier by introducing the reorganisation procedure and improving the continuation of the debtor's business during insolvency proceedings. All this helped improve the Pakistan's ranking by 11 notches from 147 to 136.
The SECP stated that way forward for ease of doing business includes: simplifying regulations and removing bottlenecks; (ii) review of rationalising tariff/fee structure; (iii) reduction in turnaround time processes; (iv) expanding single portal for business registration at SECP, Federal Board of Revenue (FBR) as well as provincial institutions and EOBI.
The way forward for SECP image building is to establish liaison and cooperation with law enforcements agencies (National Accountability Bureau (NAB) and Federal Investigation Agency) at the highest level to build working relationship; (ii) seminars/conferences on initial public offering (IPOs), corporatisation and e-services ; (iii) and employers branding.
The way forward for supervision and enforcement required: (i) strengthening and empowering legal teams and strict compliance culture, through capacity building, improved surveillance, monitoring and inspection regime; (ii) stringent penalties to act as deterrence; (iii) "name and shame" - making information public about misconduct/non-compliance by brokers; (iv) and risk-based supervision model.
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