ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) Chairman Aamir Khan has said that the SECP had successfully converted the Covid-19 challenge into opportunities for the organisation and investors. Despite all odds, stock market was kept operational through remote operations; a Secure Transacting Registry was introduced to facilitate SMEs' financing, Regulatory Sandbox was launched for startups, for the first time Rs200 billion government Sukuk were issued through book building; and loans of small borrowers were rescheduled to give financial relief.
Aamir Khan was delivering his keynote address at a webinar on "Recovering from Covid-19: Apex Regulator's Corporate and Capital Market Perspective", organised by the ICAP. The webinar was moderated by Muhammad Farid Alam, CEO AKD Securities.
Ashfaq Yousaf Tola, chairman of the Economic Advisory and Government Relations Committee, ICAP, Khalilullah Shaikh, President ICAP, and Hina Masood Usmani, Vice President ICAP, were the other speakers. Describing key Covid challenges, Aamir said that ensuring continued operations of the regulator, the financial markets, and the intermediaries had been the priority.
Maintaining market discipline, regulatory compliance and stakeholders' protection, and dealing with emerging risks were key tests that were handled with a coordinated approach. The SECP itself and its regulated markets rapidly changed to adopt remote operations and technological innovations, for continued and smooth operations.
Through our sincere efforts, resilience and perseverance, we have been able to rise up to the unprecedented challenges, Aamir said. Though remote operations were challenging, as this was never practiced before, however, we were able to manage that quite comfortably.
Operational measures, volatility control mechanisms by introducing market halts and circuit breakers, close monitoring of trade and liquidity positions, and timely interventions helped in smooth settlements of trade. In this challenging environment, Pakistan Energy Sukuk-II - first ever Rs200 billion listed Sukuk issued at the PSX through book-building at K-0.10 percent, saving Rs18 billion on debt servicing costs.
Moreover, two equity issues of Rs800 million each and two debt (Sukuk) issues of Rs2 billion (BIPL) and Rs2.5 billon (KEL) were also issued in the market. These successful transactions proved that out capital market have the ability to raise capital, even at most difficult times.
There was a time in mid-March, Aamir said, when we were facing extreme pressure to suspend market operations and halt market activity for some time, as is the case of Bangladesh, Sri Lanka, and the Philippines. Interdependence on external players e.g. banks, ISPs etc., difficulty in commuting and reliance on untested systems were the arguments for closure of markets.
Though there was unprecedented nose-dive decline, markets remained operational throughout the period, reflecting favorably on the wide-ranging reforms introduced and implemented over the previous six months, he said.
The SECP chairman said that the Secured Transaction Registry, launched on April 30th, 2020, is potential game changer for the SMEs to access bank borrowing. The STR is serving financial institutions to register interests on moveable assets of unincorporated business. So far, more than 77K interests have been registered, facilitating financing to small businesses.
Taking an aggressive route, the SECP successfully rolled out its first ever regulatory sandbox cohort, and received overwhelming response as 32 applications/proposals are received, out of which 5-6 may be finally allowed to test their innovative ideas in real but controlled environment. The SECP is on a digital transformational journey, "Leading through Automation Prowess-LEAP" programme.
"We are on the path of achieving end-to-end automation of all internal and external processes. Introduction of XBRL in coordination with the ICAP is one of the key targets of this programme," Aamir Khan added.
Copyright Business Recorder, 2020