There is a need to make amendments to the current Securities and Exchange Commission of Pakistan (SECP) law and the draft law is ready and would soon be presented to the Parliament, said its acting chairman Tahir Mehmood here on Tuesday. He stated this while briefing the National Assembly Standing Committee on Finance on the working of SECP. "There is a need to make some amendments to the current SECP law."
Abdul Rashid Godial of Muttahida Quami Movement (MQM) pointed out persistent absence of Finance Minister and Secretary Finance from the committee's meeting and also lodged a strong protest. The committee meeting was convened for a briefing from senior officials of the Finance Ministry and SECP on the working of corporate sector's regulator. The committee was told that the SECP objectives are to create a healthy environment for corporatisation, promote good corporate governance and protect shareholders rights. The functions of the SECP include; (i) the registration of companies, maintenance of corporate registry and advisory to corporate sector; (ii) administer and monitor regulatory compliance by companies;(iii) enforcement of corporate laws on public listed companies, unlisted public limited, private limited companies with a paid-up capital of Rs 7.5 million and above and not for profit companies;(iv) adjudication of defaults, and process appeal and review application;(v) conduct inspections and investigations and to propose and/or amend rules and regulations.
The SECP is responsible for the supervision of both securities and derivatives markets. In particular, it has the responsibility for the supervision of primary securities markets (issuance); and secondary markets (for both securities and derivatives).
The SECP is also responsible for licensing, monitoring and enforcement of non-banking finance (NBF) sector entities. The NBFCs include: Assets Management Companies (AMCs), Pension Fund Managers, Real Estate Investment Trust (REIT) Management Companies, Private Equity Fund Managers, Investment Advisors (lAs), Leasing Companies, Housing Finance Companies and Investment Finance Companies ie Investment banks engaged in Investment Finance Services (IFS). The meeting was further informed that presently, State Bank of Pakistan (SBP) regulates 88.9% of the banking and Non-Bank Financial (NBF) sector assets and the remaining 11.1% assets of the financial sector are under the regulatory purview of the SECP. The senior officials of the SECP said that the SECP is also responsible for the development of insurance sector including life and non-life insurance sector, takaful operators (Islamic insurance), insurance intermediaries, insurance brokers and surveyors and other bodies related to the insurance sector.