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The Securities and Exchange Commission of Pakistan (SECP) has decided to write a letter to the Federal Board of Revenue (FBR) to incorporate some proposals of the Pakistan Stock Exchange Stockbrokers Association (PSA) in the next fiscal budget.

The SECP on Wednesday issued decisions of the SECP Policy Board for compliance by the SECP.

The SECP Policy Board agreed that in order to be effective it is important that the Board's input, through its chairman, be considered in the matter of appointment of the commissioners/chairman of the SECP.

All policy decisions should be published in line with the prescribed provisions.

The SECP Policy Board resolved that all proposals of the PSA are hereby generally agreed with the exception of few proposals, which were not specifically agreed nor were they included in the demands presented by the Pakistan Stock Exchange (PSX).

Further, the SECP (Commission) has been directed to look into each of the remaining proposals and arrange that these are appropriately implemented. The board also directed the commission to write to the FBR with regard to the following tax proposals: tax impediments/disincentives for startups; seizing of accounts of companies (Pakistan Business Council proposal); withdrawal of capital value tax (CVT) regime in the presence of capital gains tax (CGT); revisiting the definition of 'security' for 37(a) exemption in Income Tax Ordinance, 2001 (for allowing exemptions to other securities that don't fall under this definition).

As far as proposals of the Pakistan Stock Exchange (PSX) Market are concerned, the proposals were presented by the chairman, PSX before the SECP Policy Board for consideration.

The SECP Policy Board agreed with all the proposals of the Pakistan Stock Exchange.

The Board resolved that the commission be and hereby is directed to proceed expeditiously to implement, within seven days, the recommendations of the Pakistan Stock Exchange, additionally eliminating the requirement for periodic broker license renewal.

On the restructuring of PSX Board, approval of SECP for Board of Directors of PSX should be given on the basis of duly framed "fit and proper" criteria. The Code of Corporate Governance should prevail in as far as role of PSX and its committees were concerned.

The CRO must report to the SECP with a dotted line for administrative purposes to the CEO.

The Board directed that the specific F&P criteria for stock exchanges should be made, the SECP Policy Board directed the SECP and PSX.

On the presentation of CEO of Pakistan Business Council (PBC), the SECP Policy Board resolved that the PBC proposals be and are hereby substantially agreed by the board and the commission should proceed to expeditiously implement the PBC's proposals.

In this regard, the following observations of the board were noteworthy: (i) Section 462 - payment of fee - The commission directed to look into this matter. (ii) The chairman stated that the Companies Act, 2017 should be repealed or major amendments would have to be made. (iii) The chairman suggested that Farrukh Sabzwari and Naeem should also join the Regulations Committee. (iv) The board agreed that pending removal of Section 452 a waiver from the application of this section should be given and directed the commission to look into this and report within seven days. (v) Section 255 - The board did not agree to this suggestion and proposed that the power to approve seizure/investigation operation should be exercised by at least two commissioners.

The SECP Policy Board resolved that, the members of the Policy Board other than ex-officio members shall be entitled to fee amounting to Rs 75,000 for attending a board meeting.

Further, the board resolved that the members of the board, other than ex-officio members, commissioners or employees, and any other person invited to attend a meeting of a committee, constituted by the board, shall be entitled to fee amounting to Rs 50,000/- per meeting.

The secretary was advised to submit the decision to the Ministry of Finance for concurrence prior to its implementation. The chairman stated that he would not be taking any fees. Kausar Ali Zaidi, on behalf of the board, appreciated the gesture of the chairman.

Copyright Business Recorder, 2020


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