ISLAMABAD: The Chairman, Securities and Exchange Commission of Pakistan (SECP) here on Saturday briefed the Federal Minister for Finance, Senator Mohammad Ishaq Dar, on the progress regarding the demutualization of the stock exchanges.
The minister was informed about the background of the demutualization of the cxchanges and requirements stipulated in the Stock Exchanges (Corporatization, Demutualization and Integration) Act, 2012 in relation to divestment of 60 percent shares of the stock exchanges lying in the blocked account to the Strategic Investor(s) (SIs), general public and local financial institutions.
As required under the Act, the SECP had issued directions to the Stock Exchanges for completion of the divestment process by August 25, 2015. The stock exchanges had been in contact with various international exchanges for divestment of stake to SI and/or technical collaboration. However, nothing concrete has materialized until now and no firm commitments have been received from any counterpart in this regard.
The minister was further briefed on the international trend on integration of stock exchanges and how it helps reduce fragmentation. It was communicated that through integration, markets benefit from operational synergies, cost cutting, economies of scale and streamlined regulation. The Finance Minister asked the SECP to have the demutualization process completed without any further delay in consultations with the stakeholders. The Stock Exchanges (Corporatization, Demutualization and Integration) Act, it may be mentioned empowers the SECP to conclude the divestment process if the exchanges are unable to abide by the timeline.
He mentioned that with growing economic activity and business friendly policies of the government the capital market of the country possesses the potential of emerging as a regional investment hub. While appreciating the performance of the SECP and reforms implemented, he reiterated that providing a fair and transparent market that complies with international best standards is the key to development and the government stands with the SECP in its efforts to ensure the same.
The chairman SECP informed that the report regarding 2008 stock market crisis had been completed. The Finance Minister directed that in order to ensure transparency, the report should be presented in the Policy Board and, after appraisal by the Board; it should be released for information of the general public.
