The Securities and Exchange Commission of Pakistan (SECP) has issued its annual report for the fiscal year 2019-20. The report contains details of measures taken by the SECP to promote capital formation in the market, improve financial access for small and medium enterprises, expand financial inclusion, provide ease and simplicity in doing business and leverage technological developments to introduce efficiency and transparency in its working process.
According to SECP Chairman Aamir Khan, the commission mainly focused on three specific areas during FY2019-20. Namely, these areas were the creation of an enabling regulatory environment for the business community, attracting investment, and boosting economic growth by simplifying the regulatory regime.
Additionally, the SECP took steps to expand market outreach and leverage technology to bring about efficiency as well as introduce a fine balance between effective enforcement and an efficient regulatory environment.
Some noteworthy regulatory reforms implemented this year include:
- Simplification of IPO regulations
- Establishment of Growth Enterprise Market (GEM) at PSX
- Introducing corporate governance regime based on comply or explain approach
- Simplification of further issue of capital regulations
- The introduction of categorization of brokers
- Revamping of margin finance product
- Introduction of simplified ‘Sahulat Account’ for low-risk investors.
Furthermore, the SECP launched a digital Secured Transaction Registry (STR) to facilitate small businesses and farmers to access bank finance without having to mortgage their homes or land.
Over 85,000 charges have been registered since April 2020, placing Pakistan in one of the 60 countries in the world that have such a registry, backed by the necessary legal framework.
The report also details priority areas to focus on for the next financial year, which include institutional strengthening through function-based restructuring in a phased manner, replacement of existing e-services with a modern business registry, development of alternate distribution channels, provide farmers the opportunity to sell their produce by way of electronic warehouse receipts on a recognized exchange and encourage growth companies and SMEs to raise capital through the capital markets.