ISLAMABAD: The Securities and Exchange Commission of Pakistan’s (SECP) Consultative Group, in its first meeting, has discussed various matters pertaining to development of the capital market and agreed to introduce important structural reforms for market infrastructure institutions.
The reforms include attainment of central counter party status by the clearing house and establishment of a settlement guarantee fund to ensure a robust and efficient risk and default management regime in accordance with the best international practices.
The group was formed to recommend the way forward for the development of capital markets in Pakistan. During the discussions, various proposals and suggestions were also put forward by the group members regarding market development and restoration of investor confidence. There was a consensus among the group members for the need to step up efforts on market development initiatives for promotion of various market segments.
During the meeting, it was emphasized that SECP, as the apex regulator, and the stock exchanges, as frontline regulators, shared the same vision of making Pakistan’s capital market a vibrant, transparent and effective regional market. It was further highlighted that the SECP had embarked on a comprehensive reforms agenda for the capital market, which would require extensive efforts and support from other stakeholders for effective implementation.
It was agreed that sub-groups and committees would be formed to deliberate and analyse various developmental areas and projects.
In order to restore investors’ confidence and to minimize chance of misuse of investors’ assets, it was agreed that necessary measures should be taken to ensure segregation of clients’ assets from brokers’ assets. Also, investor education and outreach were chalked out as important areas for coordinated efforts by all stakeholders, considering the meagre quantum of general public, which invests in the capital market. It was also stressed that the true intent and essence of demutualisation and corporatisation needed to be achieved to take the capital market forward and attract international investors of good stature for the benefit of the market and the economy.
