SEC Policy Board advises SECP to review onerous laws

November 15, 2019: The Securities and Exchange Policy Board met in Islamabad at the SECP Headquarters under the Chairmanship of Professor Khalid Mirza.

The Policy Board approved the General Takaful Accounting Regulations, 2019, the Provisional Manager and Official Liquidator Regulations 2019, Corporate Rehabilitation Regulations 2019, Directive on adoption of IFRS-14 Regulatory Deferral Accounts under section 225 of Companies Act 17, the Directive on Financial reporting of family window takaful operations  by life insurers, and Compliance Of Compulsory Group Insurance Under the Industrial and Commercial Employment (Standing Order) Ordinance, 1968,

The Policy Board took up the matter to initiate review process of the Securities Act 2015 keeping in view to remove harsh regulatory impediments that hamper the overall growth of securities market with the aim to facilitate the ease of doing business in the country. The Board also took the decision to review and rationalize the Futures Act, 2016 and the Limited Liability Partnership Act, 2017 which are onerous and cumbersome, so as to constitute a facilitating regulatory environment.  The Board also advised the Commission to revisit the Regulatory Sandbox Guidelines 2019 (Insurance) and gave directions for appropriate amendments be made to the Companies (further Issue of Capital) Regulations 2018 so as to facilitate and promote the mobilization of capital.

Firm directions were given by the Board to the Commission to recall all staff members seconded to the LEAs and also transfer back cases wrongfully referred to NAB.  Directions were also given for the LEAs to be appropriately for the cost of SECP staff seconded.

The Board directed that the Growth Enterprise Market (GEM) Listing Regulations of PSX proposed by the Commission be looked at again for easing the entire market and making provision for a premium board for a premium tier in the stock exchange for the growth of the capital market and encouraging IPOs in the primary market and

The Board took serious note of the statement of the CEO of Pakistan International Airlines Corporation regarding profitability of PIA which prima facie can be taken as manipulating the  market.  The Commission has been directed to look into and take appropriate enforcement action. The Board directed the Commission to develop a system by which public sector organizations are duly monitored for any possible violations of the laws administered by the SECP.

The Board expressed concern regarding the negative mindset of the the Commission’s staff and gave direction for appropriate steps to ensure that service orientation is inculcated in the staff rather than the current obstructive and “ruler-like” mindset.

The governance structure of the stock exchange was reviewed and substantial recommendations were made by the Board.  It was noted with concern that several months have passed and no appropriate professional has been appointed CEO of the exchange.

Regarding the SECP Annual Report 2019, the Board decided that the Commission to go back to the ‘drawing board’ and ensure it is professional, it portrays facts that are both positive and negative, states clearly the problems faced by the Commission during the past year particularly in reference to unwarranted intrusion by LEAs and also states realistically future goals and strategic plans of the Commission.

The Policy Board considered the draft Insurance Bill 2019.  The Board directed that draft Law should be reviewed to remove harsh regulatory impediments that hamper the overall growth of Insurance sector with the aim to facilitate the ease of doing business in the country. Further, the draft amendments/law be simplified and should be principles based.

It was noted by the Members of the Board that the ex-officio Secretaries who are members of the Board do not attend meetings and invariably send nominees to the meetings. This has effectively short-changed the working of the Board.

The Securities and Exchange Policy Board, in pursuance of Section 12 of the Act 1997, comprises ex-officio members of the Ministries of Finance, Commerce, and Law, SBP, SECP and persons of eminence from the private sector. 

Posted on: 2019-11-16T21:40:00+05:00