This document provides an overview of the Securities and Exchange Commission of Pakistan (SECP). It outlines the SECP's history, vision, mission, strategy and objectives. It describes the SECP's organizational structure, including its divisions and departments. The SECP regulates Pakistan's corporate sector, capital markets, insurance companies, non-banking financial institutions and pension funds. It aims to develop a modern and efficient regulatory framework based on international standards to foster economic growth and prosperity.
Securities & Exchange commission of Pakistan (SECP)IRFAN UR REHMAN
This power point file contains the details of Securities & Exchange Commission of Pakistan (SECP), Its brief history, functions and objectives, organizational structure, process of registering a private company and divisions.
It also shows the types of companies at the end.
With Reference as: -
https://www.secp.gov.pk/
Cg & Role of SECP Securities and Exchange Commission of Pakistan ASAD ALI
The Securities and Exchange Commission of Pakistan (SECP) was set up in pursuance of the Securities and Exchange Commission of Pakistan Act, 1997. This Act institutionalized certain policy decisions relating to the constitution and structure, powers, and functions of the SECP, thereby giving it administrative authority and financial independence in carrying out its regulatory and statutory responsibilities.
The SECP became operational in January 1999 and has come a long way since then. It was initially concerned with the regulation of corporate sector and capital market. Over time, its mandate has expanded to include supervision and regulation of insurance companies, non-banking finance companies and private pensions. The SECP has also been entrusted with oversight of various external service providers to the corporate and financial sectors, including chartered accountants, credit rating agencies, corporate secretaries, brokers, surveyors etc. The challenge for the SECP has amplified manifold with its increased mandate.
Securities & Exchange commission of Pakistan (SECP)IRFAN UR REHMAN
This power point file contains the details of Securities & Exchange Commission of Pakistan (SECP), Its brief history, functions and objectives, organizational structure, process of registering a private company and divisions.
It also shows the types of companies at the end.
With Reference as: -
https://www.secp.gov.pk/
Cg & Role of SECP Securities and Exchange Commission of Pakistan ASAD ALI
The Securities and Exchange Commission of Pakistan (SECP) was set up in pursuance of the Securities and Exchange Commission of Pakistan Act, 1997. This Act institutionalized certain policy decisions relating to the constitution and structure, powers, and functions of the SECP, thereby giving it administrative authority and financial independence in carrying out its regulatory and statutory responsibilities.
The SECP became operational in January 1999 and has come a long way since then. It was initially concerned with the regulation of corporate sector and capital market. Over time, its mandate has expanded to include supervision and regulation of insurance companies, non-banking finance companies and private pensions. The SECP has also been entrusted with oversight of various external service providers to the corporate and financial sectors, including chartered accountants, credit rating agencies, corporate secretaries, brokers, surveyors etc. The challenge for the SECP has amplified manifold with its increased mandate.
Brief History, Responsibilities and Functions of the Securities and Exchange Commission in Nigeria.
The Securities and Exchange Commission (SEC) is the apex regulatory body for Nigeria's capital market. It, however, operates under the supervision of the Federal Ministry of Finance.
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Call reporting, DFAST, CCAR - the amount of time and energy spent by banks to comply with cumbersome banking regulations is painful at best. You can turn this process into an advantage for your company by leveraging current advances in technology to cost-effectively streamline compliance with regulatory requirements and deliver more advanced planning and analysis that fuels company growth.
In 2020, the Ministry of Home Affairs established a committee led by Prof. (Dr.) Ranbir Singh, former Vice Chancellor of National Law University (NLU), Delhi. This committee was tasked with reviewing the three codes of criminal law. The primary objective of the committee was to propose comprehensive reforms to the country’s criminal laws in a manner that is both principled and effective.
The committee’s focus was on ensuring the safety and security of individuals, communities, and the nation as a whole. Throughout its deliberations, the committee aimed to uphold constitutional values such as justice, dignity, and the intrinsic value of each individual. Their goal was to recommend amendments to the criminal laws that align with these values and priorities.
Subsequently, in February, the committee successfully submitted its recommendations regarding amendments to the criminal law. These recommendations are intended to serve as a foundation for enhancing the current legal framework, promoting safety and security, and upholding the constitutional principles of justice, dignity, and the inherent worth of every individual.
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Responsibilities of the office bearers while registering multi-state cooperat...Finlaw Consultancy Pvt Ltd
Introduction-
The process of register multi-state cooperative society in India is governed by the Multi-State Co-operative Societies Act, 2002. This process requires the office bearers to undertake several crucial responsibilities to ensure compliance with legal and regulatory frameworks. The key office bearers typically include the President, Secretary, and Treasurer, along with other elected members of the managing committee. Their responsibilities encompass administrative, legal, and financial duties essential for the successful registration and operation of the society.
Military Commissions details LtCol Thomas Jasper as Detailed Defense CounselThomas (Tom) Jasper
Military Commissions Trial Judiciary, Guantanamo Bay, Cuba. Notice of the Chief Defense Counsel's detailing of LtCol Thomas F. Jasper, Jr. USMC, as Detailed Defense Counsel for Abd Al Hadi Al-Iraqi on 6 August 2014 in the case of United States v. Hadi al Iraqi (10026)
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NATURE, ORIGIN AND DEVELOPMENT OF INTERNATIONAL LAW.pptxanvithaav
These slides helps the student of international law to understand what is the nature of international law? and how international law was originated and developed?.
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WINDING UP of COMPANY, Modes of DissolutionKHURRAMWALI
Winding up, also known as liquidation, refers to the legal and financial process of dissolving a company. It involves ceasing operations, selling assets, settling debts, and ultimately removing the company from the official business registry.
Here's a breakdown of the key aspects of winding up:
Reasons for Winding Up:
Insolvency: This is the most common reason, where the company cannot pay its debts. Creditors may initiate a compulsory winding up to recover their dues.
Voluntary Closure: The owners may decide to close the company due to reasons like reaching business goals, facing losses, or merging with another company.
Deadlock: If shareholders or directors cannot agree on how to run the company, a court may order a winding up.
Types of Winding Up:
Voluntary Winding Up: This is initiated by the company's shareholders through a resolution passed by a majority vote. There are two main types:
Members' Voluntary Winding Up: The company is solvent (has enough assets to pay off its debts) and shareholders will receive any remaining assets after debts are settled.
Creditors' Voluntary Winding Up: The company is insolvent and creditors will be prioritized in receiving payment from the sale of assets.
Compulsory Winding Up: This is initiated by a court order, typically at the request of creditors, government agencies, or even by the company itself if it's insolvent.
Process of Winding Up:
Appointment of Liquidator: A qualified professional is appointed to oversee the winding-up process. They are responsible for selling assets, paying off debts, and distributing any remaining funds.
Cease Trading: The company stops its regular business operations.
Notification of Creditors: Creditors are informed about the winding up and invited to submit their claims.
Sale of Assets: The company's assets are sold to generate cash to pay off creditors.
Payment of Debts: Creditors are paid according to a set order of priority, with secured creditors receiving payment before unsecured creditors.
Distribution to Shareholders: If there are any remaining funds after all debts are settled, they are distributed to shareholders according to their ownership stake.
Dissolution: Once all claims are settled and distributions made, the company is officially dissolved and removed from the business register.
Impact of Winding Up:
Employees: Employees will likely lose their jobs during the winding-up process.
Creditors: Creditors may not recover their debts in full, especially if the company is insolvent.
Shareholders: Shareholders may not receive any payout if the company's debts exceed its assets.
Winding up is a complex legal and financial process that can have significant consequences for all parties involved. It's important to seek professional legal and financial advice when considering winding up a company.
2. 2
Group Members
Syed Hammad Ali (L1f15bsaa0019)
Sadia Tariq (L1f15bsaa0005)
Burhan Khalid (L1f15bsaa0025)
Muhammd Yasim (L1f15bsaa0092)
Syed Ahmed Haider Sherrazi (L1f15bsaa0015)
Usama Arshad (L1f15bsaa0043)
3. 3
Table of contents
About SECP
History
Mission
Vision
Strategy
Objective
Organizationstructure of SECP
SECP divisions
Relationshipof SECP with corporate sector
Rules, regulations & conditions
SECP & Stock Exchange
How its decisions impacts
SECP & PakistanEconomy
How its decisionimpacts on PakistanEconomy
Conclusions
4. 4
About SECP:
The Securities and Exchange Commission of Pakistan is the financial regulatory
agency in Pakistan whose objective is to develop a modern and efficient corporate
sector and a capital market based on sound authority principles, in order to encourage
investment and foster economic growth and prosperity in Pakistan.
The head office of SECP is located in the Blue Area of Islamabad. It also has some
regional offices in Islamabad, Karachi, Lahore, Multan, Peshawar, Sukkur, Faisalabad
and Quetta. These regional offices are called by Company Registration Offices.
The SECP was initially responsible for the regulation of corporate sector and capital
market. Over time, its mandate has expanded to include supervision and regulation of
insurance companies, non-banking finance companies and private pensions. The
SECP has also been entrusted with oversight of various external service providers to
the corporate and financial sectors, including chartered accountants, credit rating
agencies, corporate secretaries, brokers, surveyors etc.
History:
The Securities and Exchange Commission of Pakistan (SECP) is the successor of the
erstwhile Corporate Law Authority (CLA), which was an attached department of the
Ministry of Finance. The process of restructuring the CLA was initiated in 1997 under
the Capital Market Development Plan of the Asian Development Bank (ADB). A
Securities and Exchange Commission of Pakistan Act was passed by the Parliament
and promulgated in December 1997. In pursuance of this Act, the SECP, having
autonomous status, became operational on January 1 1999. The Act gave the
organization the administrative authority and financial independence to carry out the
reform program of Pakistan’s capital market.
The scope of the authority of the SECP has been extensively widened since its
creation. The insurance sector, non-banking financial companies, and pension funds
have been added to the purview of the Commission. Now the SECP's mandate
includes investment financial services, leasing companies, housing finance services,
venture capital investment, discounting services, investment advisory services, real
estate investment trust and asset management services, etc. The SECP also regulates
various external service providers that are linked to the corporate sector, like
chartered accountants, rating agencies, corporate secretaries and others.
Vision:
The vision of SECP is the development of modern and efficient corporate sector and
capital market, based on sound regulatory principles.
5. 5
Mission:
The mission of SECP is to develop a fair, efficient and transparent regulatory
framework, based on international legal standards and best practices.
Strategy:
The strategy of SECP is to develop an efficient and active regulatory body, ensures
proper risk management procedures in the capital market and protects investors
through responsive policy measures and effective enforcement practices.
Objective:
These are the major objectives of SECP:
It was initially concerned with the regulation of corporate sector and capital
market.
Now it also concerns with the supervision and regulation of insurance
companies, non-banking finance companies and private pensions.
The SECP has also been entrusted with oversight of various external service
providers to the corporate and financial sector.
Securities and Exchange Commission of Pakistan has kept its mission of developing a
modern and efficient corporate sector and capital market based on sound regulatory
principles. That would provide impetus for achieving high economic growth and
fostering social harmony in the country.
Securities and Exchange Commission of Pakistan Chairman said,
Our objective is to develop a fair, efficient and transparent regulatory framework based
on international legal standards and best practices for protection of investors and
mitigation of systemic risk aimed at fostering growth of a robust corporate sector and
broad-based capital market in Pakistan.
The investor protection would remain the prime objective of the regulator. The regulator
would ensure complete compensation to small investors. The prime responsibility of the
regulator is to secure the small investor, bring transparency and ensure growth of the
capital market. The SECP conducts off-site and on-site inspections and, in more
sensitive cases the inspections are done by the Joint Inspection Team of CDC, NPCCL
and PSX. As the market touched new heights, a fresh wave of investors have entered the
market and some brokers have started deposit taking and offering fixed profits to
investors which is illegal. The SECP has also started operations for doing market
intelligence, in order to check and preempt brokers if they continue their wrongdoings
despite warnings.
6. 6
Commission:
Commissionof SECPisconsistof Commissioners,includingchairman.Commissionisbasedon5-7
members. The commissioneris Appointedbythe Federal Government.Ithassome Expertise in,
Securitiesmarket
Law
Accountancy
Economics
Finance [insurance]
Industry
Commissionersshall alwaysbe of private sectorpersons.
Chairman:
The Federal Governmentshall appointone of the Commissionerstobe the Chairmanof the
Commission.(2-3Years). The chairman is known as the CEO of the commission, its duty is to
advice and provide assistance on various day-to-day activities and issues. They can provide
input assistance in processing the new laws and amendments in existing laws and
rules/regulations.
Security & Exchange Policy Board
Commission
Chairman
Chairman
Secretariat
Local &
Bilateral
Relations
Department
Media &
Corporate
Communication
Department
Islamic
Finance
Department
Professional
Developme
nt
Department
Advisor to the
commission/
Chairman
Systemic Risk
Department
7. 7
Appointment of advisers andconsultants:
The Commissionmay,employandpayconsultantsandagentsandtechnical,professional andother
advisorsincluding,withoutlimitation.
Bankers
Stock-brokers
Surveyors
Valuers
Accountants
Lawyers
The Chairman has its own secretariat which is responsible for managing the chairman’s
official Schedule, engagements and correspondence.
It coordinates with the internal and external stakeholders on behalf of the chairman. It
works on behalf of the chairman and deals with the personals that effect or being effected
by the decisions of the SECP.
The chairman Secretariat is further divided into Five different parts, I’m actually discuss each
of those departments in term.
1- Local & Bilateral Relations Department
Its handles correspondence received from federal and provincial government. It will
Also handle,
Ministries and parliaments.
Donor Agencies
Regulatory Authorities
Law Enforcement agencies
Bilateral Relations with others regulators.
2- Media Corporate Communication Department
It interacts with media corporations to provides timely information on events,
happening and changes that are occurred by the law regulations. It can also organize
the regular briefings on various reform measures, and it can also work on the SECP’s
publications, including their,
Annual Report
Newsletter
Websites
Portals
Supplements etc.
3- Islamic Finance Department
Its main duty is to enforce the Islamic laws on the registered Companies, and creates
regulatory framework for Shari’ah- compliance companies to ensure that they
undertake their business activities in accordance with Shari’ah.
8. 8
4- Professional Development Department
Its main duty is to conduct the seminars and arranges the training for the SECP
offices and other capital market Intermediaries. It is also responsible in oversighting
of institute of Capital market and the Pakistan Institute of Corporate Governance.
5- Systemic Risk Department
This department considers the importance of management of systematic risk for the
commissioner.
Advisor to the Commission/ Chairman
It provides assistance and advices to various day–to-day issues.it can assist the
chairman on all the related issues that can be arises. It can also provide input in
processing
New Laws
Amendments to existing laws and rules/regulations
Here the brief information about the Organizational Structure of security exchange
commission of Pakistan. Note this information is extract from official side of (SECP)
There is a very helpful organizational chart of organizational structure.
Security and exchange policy port the policy board & its objective
That is appointed by the federal government. previously under the Securities and Exchange
Commission of Pakistan Act eight had nine members of which five were from public sector
and four from private sector but with effect from six of August 2016 an amendment has been
made into the act as a result of which the policy board has now eleven members of which five
are from public sector and six are from private sector.
Here I discuss the public sector.
(members the first one is secretary to the Government of Pakistan finance division the second
member official secretary to the Government of Pakistan Law Division the third member of
the policy board is official secretary to the Government of Pakistan commerce division and
the fourth member of the policy board is official the chairman of the Commission and lastly
the fifth member is a deputy governor of the State Bank of Pakistan who is nominated by the
governor of the State Bank of Pakistan)
The six members from private sector are appointed by the federal government and they are
known for their integrity experience in commerce and industry that includes corporate law,
accountancy financial services, investment, insurance, banking, education and various other
related fields. The policy board guides the SECP in matters relating to its functions and
approves the annual budget. The main objective of the policy board is to guide the
Commission in all matters relating to its functions and formulate policies. In consultation
with the Commission the policy board is also responsible for advising the government on
matters falling within the purview of the SECP Act and other corporate laws.
9. 9
Commission
The Commission has four commissioners the Chairman is one of the commissioners and then
there are four other commissioners who assist the Chairman in number of ways the second
Commissioner the first one being chairman. The second motion that deals with matters that are
related to corporate sector the third Commissioner
deals with capital markets the fourth Commissioner deals with specialized companies such as
non-bank financing. Company and the fifth commissioner deals with the insurance sector.
Chairman
The Chairman is the CEO of the Commission he provides assistance and advice on various
day-to-day issues. He also provides his input in processing new laws amendments to existing
laws and rules and regulations. The Chairman has his own Secretariat that's called
Chairman's Secretariat it is responsible for managing Chairman's official schedule
engagements and correspondence it coordinates with internal and external stakeholders on
behalf of the Chairman.
First COMMESONAR’S
Now we discuss each of the four commissioners in turn the first being the Commissioner for
the corporate sector. now each of the commissioners offices are first of all divided into
different divisions and then each division has further departments, so focusing first on the
commissioner for corporate sector.
Company law division
it is responsible for incorporation and dissolution of companies and acceptance or
maintenance of information it also monitors and enforces the corporate legal framework to
promote transparency, accountability, good corporate governance and practices.
In this division there are further three departments.
The first department is corporate supervision department
it supervises compliance by listed companies public unlisted companies
private companies that have paid up share capital of at least 100 million
rupees it's also deals with companies that are formed under section 42 and 43
of the Companies Ordinance 1984 with the exception of insurance companies non
banking finance companies.
The next Department is corporatization and complies department
it is responsible for administration of the company's order an ordinance 1984 and
the rules and regulations made under it along with other relevant laws. It registers companies
regulates their statutory functions and monitors corporate compliance it supervises the
working of eight company registration offices that I will mention in the next
Department.
10. 10
The next Department is company registration offices Department
The SECP has eight company registration offices that are located at Islamabad
Peshawar facility' Lahore Multan Quetta and Karachi then in this commissioner's office.
Prosecution and legal affairs department
It provides as the name suggests prosecution litigation and legislative support like
the previous division this division has further departments but there are only two departments
The first Department is prosecution and civil litigation department
It streamlines mechanism visible litigation it represents the SECP in civil and corporate
proceedings through special public prosecutors and prepares the pleadings
The last department in this division is that of legal affairs department
It drafts and reviews legislation and provides assistance and liaises with the
federal government about proposed legislation it also gives legal opinions vets and
reviews laws agreements policies show-cause notices notifications and orders then in this
commissioner's office.
Support services division
It basically provides administrative support unlike the other two divisions
this division is also divided into further departments.
The first department is that of a human resource department
It ensures a congenial working atmosphere for the work force which includes continuous
alignment of HR policies and their implementation in line with the organizational objectives
and framework it also deals with HR planning and budgeting recruitment compensation
benefits and funds management furthermore it deals with performance appraisals and
promotions and employee relations.
The next department is finance department
which processes payments for authorized transactions it also liaises with banks to ensure
then banking arrangements are adequate and invests surplus fund.
The last department in this division is that of administration department
It is responsible for organizing events procurement provision and maintenance of office
equipment medical services maintenance and renovation of office facilities such as daycare
and gym safety and security premises SECP.
Second COMMESONAR’S
It provides support to the Capital Markets now like other commissioners there are further
three divisions.
11. 11
Securities market division
It monitors regulates and develops the capital markets it regulates the primary and secondary
markets as well as licensed entities and regulated persons through licensing surveillance
investigation enforcement and rule making. it also processes and grants approvals to
prospectuses for public offering of both debt and equity securities.
This division has further three departments
Policy regulation and development department
It designs and administers SECP's capital market reform agenda. including review and
formulation of regulatory policies and framework managing licensing renewals and
governance of affairs of securities exchanges central repositories and clearing houses
furthermore it deals with implementation of structural reforms introduction of new products
and corporate governance standards for listed companies.
Public offering and regulated persons Department
It formulates the regulatory framework for commodity exchange and approves the new
products for listing it registers brokers and agents for the stock and commodity exchanges the
debt securities trustees’ underwriters and transfer agents and book runners.
Surveillance supervision and enforcement department
It is responsible for monitoring and surveillance or of the trading activities at stock exchanges
it is also responsible for oversight off-site monitoring on-site inspections investigations and
inquiries
of capital market participants.
Investor education and international relations department
it plans designs develops and executes SECP's investor education and awareness program
through the virtual Gemma punji web portal and delivers educational seminars besides
ensuring resolution of investors complaints it also liaises with multilateral standard-setting
forums such as IOSCO, IOPS, IAIS etc.
Information systems and technology division Department
it provides technology support to create the required information technology environment
Third Commissioner
specialized companies it provides regulatory environment for a robust non-banking financial
and Madaba sector it also registers Madaba companies in this commissioner's office.
Policy regulation and development department
it performs the functions of licensing registration provision of regulatory framework and
granting necessary regulatory approvals to the NBF sector which includes mutual funds our
EIT funds pension funds private funds and mod ABBA's and microfinance leasing companies
and investment banks.
Supervision and enforcement department
it is primarily responsible for centralized functions of on-site in faction off site surveillance
and enforcement of non-bank finance sector.
Fourth Commissioner
commissioner for insurance sector like other commissioners there is a division which
12. 12
is called insurance division and then there are further departments the insurance division
regulates supervises and promotes sound development of insurance sector which includes life
and non-life insurance companies at the carful operator’s insurance inspectors and
intermediaries.
Policy regulation and development department
It is responsible for policy reform, actuarial work reinsurance treaty facultative, reinsurance
approval, NOC for purchasing insurance policies from broad registration and registration at the
Securities and Exchange Commission of Pakistan we also have a translations department which
was created in the wake up of the Supreme Court judgment mandating the adoption of URDU
as the official language. it is responsible for translating all relevant laws rules and regulations
into new language it also trains employees in to do typing. then we have a few other offices
which are connected with the Securities and Exchange Commission of Pakistan .
Relationship of SECP with Corporate Sector: -
The economic growth of the country is dependent on the inflows of foreign capital from
international corporate sector and the Securities and Exchange Commission of Pakistan
(SECP) is keen to accommodate international companies though liberalization of stringent
restrictions. SECP has provided all assistance to the international corporate sector in
providing ease of starting and doing business and help the existing and prospective foreign
companies to expand their investment portfolios in Pakistan.
However, SECP is determined to create conducive environment for corporate sector to
thrive and provide level playing field to all stakeholders, especially the foreign investors. The
SECP is engaging with business leaders, who are the main stakeholder of the economy and
without their cooperation and support ambitious reforms agenda will not bear fruit.
Enhanced checks and systematic changes to bring transparency to Pakistan Stock Exchange
(PSX) and brokerage firms has restored the confidence of investors, making Pakistan a
potential attraction not only for local, but also for foreign investors. The Pakistani capital
mark is fully geared to support the capital needs of the industry and shortly PSX will
introduce new products to meet the needs of the corporate sector, which has been highly
dependent on lending by banks.
The economic woes of the country cannot be addressed without creating conducive
environment for attracting foreign investment and providing competitive edge to Pakistan's
corporate sector and industry to grow and bridge the import and export gap. It is pertinent
to mention here that recently the SECP has taken number of steps to provide ease of starting
and doing business in Pakistan, such as considerably reducing the incorporation time of
companies, integration of system with the FBR and the government of Punjab etc.
Moreover statutory reporting requirements have been simplified,facilitation desks have been
set up at CROs and the IPO process has been revamped and simplified to assist the corporate
sector and investors.
13. 13
Rules and Regulations: -
SECP has notified draft regulations regarding further issue of shares by companies.
Currently, companies issuing shares by way of right issue, bonus issue, other than right,
shares having differential rights & privileges, shares at discount or employee stock option
schemes are required to comply with the requirements of the Companies Act, 2017.
In addition to requirements of Act, compliance with applicable requirements of
Companies (Issue of Capital) Rules, 1996 and Guide on issue of shares otherwise than right
is mandatory. Similarly, companies issuing different kinds of shares with varied rights and
privileges are required to comply with the requirements of the Act and Companies'' Share
Capital (Variation in Rights and Privileges) Rules, 2000.
SECP has proposed amendments to Non-Banking Finance Companies and Notified Entities
Regulations, 2008.
Under the regulations, an asset management company shall not enter, on behalf of a
collective investment scheme, into transactions with any broker that exceed fifteen percent
of the Commission payable by a collective investment scheme in any one accounting year.
Provided that this restriction shall not apply to transactions relating to money market
instruments or debt securities.
In this regard, the SECP has issued draft amendments to the Companies
(Incorporation) Regulations, 2017. Under the revised regulations, the SECP has
placed additional requirements for foreign subscribers and security clearance.
In case the subscriber is a foreign company or a foreign body corporate, the
registrar shall require additional information including but not limited to, the profile
of the foreign company or foreign body corporate, detail of its directors, their
nationality and country of origin, copy of its charter, statute or memorandum and
articles.
Both on the international and domestic levels — over money laundering, the
Securities and Exchange Commission of Pakistan (SECP) has, for the first time,
framed a set of regulations.
According to the new regulations, both NGOs and INGOs cannot directly or
indirectly participate in any political campaign for elective public office, or engage in
activities akin to those of a political party. They are also barred from funding political
parties, individuals or any other associations that may be set up for such purposes.
Although all NGOs are registered with the SECP under the Companies Ordinance
1984, there was no complete set of regulations to oversee their conduct. The new
regulations have been formulated under the Companies Act 2017, and all NGOs
registered with the Commission must abide by them.
14. 14
1- Security Market Division:
It monitors regulates and develops the Capital markets, its regulates the Primary &
Secondary markets as well as licensed entities and regulated persons. Regulated
persons through licensing, Observation, Investigation, enforcement and rule making.
Its also processes and grants approval to prospectuses for public offering of debt and
equity securities.
Policy Regulation & Development Department
This department designs and administers SECP’s Capital market reforms Agenda
including the,
Review and formation of regulatory policies and framework.
Managing Licensing, renewals and governance affairs of securities
exchanges, central depositories and clearing houses,
Furthermore, it deals with the structural reforms, Introduction of new
products,
And corporate governance standards for listed companies.
Capital market
Security
Market
Division
Investor
Education &
International
Relations
Department
Information
System &
Technology
Department
Policy
Regulation &
Development
Department
Public
Offering
&Regulated
persons
Department
Surveillance,
Supervision &
Enforcement
Department
15. 15
Public Offering &Regulated persons Department
This department Formulates the regulatory framework for Commodity Exchange
and
Approves the new products for listing
It registers brokers and agents of the stock and commodity exchanges,
The debt securities trustees, underwriters, balloters, transfer agents and
book runners.
Surveillance, Supervision & Enforcement Department
This department is responsible for monitoring and surveillance of trading activities
at stock exchanges. It is also responsible for oversight, offsite monitoring, onsite
inspections, investigations and enquiries of capital market participants.
2- Investor Education & International Relations Department
This department plans, designs, develops and executes SECP’s investor education
and awareness program through the virtual ‘jamapunji’ web portal and delivers
educational seminars, besides ensuring resolution of investor complaints. It also
liaises with multilateral standard setting forums.
3- Information System & Technology Department
It can provide technology support to create the required information technology
environment.
It is claimed that stock market brings more risk to the unexperienced investors and
brokers are usually suspected for this due to their fraudulent attitude.
The Security & Exchange Commission of Pakistan (SECP), plays a role of liaison between
stock exchange and the investors, it gives training and other seminar activities to the new
investors who want to invest in the Stock exchange.
RULES AND REGULATION OF SECP FOR STOCK EXCHANGE
1- NO EXCHANGE TO OPERATE WITHOUT REGISTRATION
No Exchange shall operate or carry on its functions, and no person shall use or utilize,
for the purpose of any transaction or dealing in any security, the facilities or services of an
Exchange, unless such Exchange is registered under this Ordinance.
2- BROKERS OR AGENTS NOT TO ENGAGE IN BUSINESS WITHOUT
REGISTRATION
No person shall act as broker or agent to deal in the business of effecting transactions
in securities unless he is registered with the Commission in such manner, on payment of such
fees and charges and on such conditions as may be prescribed.
16. 16
3- CANCELLATION OF REGISTRATION
Where the Commission is of opinion that Exchange or any member, director or officer
of an Exchange has violated any provision, or has otherwise neglected or failed to comply with
any requirement, of this Ordinance, or of any rule, regulation or direction made or given
thereunder, the Commission may, (if it considers it necessary for the protection of investors or
to ensure fair dealings or fair administration of the Exchange) (1) suspend or cancel the
registration of the Exchange and (2) may also displace the governing body or other authority
of the Exchange; (3) suspend or remove the director, officer or member from his office in, or
membership of the Exchange.
4- ACCOUNTS, ANNUAL REPORTS, RETURN, ETC.
Every Exchange and every director, officer and member thereof shall prepare and maintain
such books of accounts and other documents in such manner as may be prescribed; and every
such book of accounts or document shall be subject to inspection at all reasonable times by any
person authorized by the Commission in this behalf.
5- LISTING OF SECURITIES
An issuer who intends to get any of his securities listed on a Stock Exchange shall
submit an application therefore, in the prescribed form to the Stock Exchange and submit a
copy of the application to the Commission.
6- PENALTIES
(1) Whoever contravenes the provisions of section 17 shall be punishable with
imprisonment for a term which may extend to three years, or with fine which may extend to
five hundred thousand rupees, or with both.
(2) Where the person guilty of an offence referred to in sub-section (1) is a company or
other body corporate, every director, manager or other officer responsible for the conduct of
its affairs shall, unless he proves that the offence was committed without his knowledge or that
he exercised all diligence to prevent its commission, be deemed to be guilty of the offence.
Section 17 and 18 of Securities and Exchange Commission of Pakistan (SECP)
Ordinance 1969 prohibits the fraudulent acts and statements of stockbrokers. It states
that “No person shall employ any device, scheme or artifice, or engage in any act,
practice or course of business, which operates or is intended or calculated to operate
as a fraud or deceit upon any person”.
17. 17
Securities and Exchange Commission of Pakistan
The Securities and Exchange Commission of Pakistan (SECP) was set up in accordance to the
Securities and Exchange Commission of Pakistan Act, 1997. The main purpose of the
Securities and Exchange Commission of Pakistan (SECP) is to develop a smooth functioning
and efficient corporate sector and a capital market based on sound regulatory principles, to
promote sustained economic growth in the economy.
The SECP covers the following entities in their laws and regulations:
Corporate Sector (Private and Public Companies)
Capital Market (Equity Market, Debt Market, Derivatives Market)
Insurance
Non-Banking Financial Institutions (NBFIs)
Pensions
Professional Service Provider
SECP’s role is to develop corporate sector and capital market based on the sound regulatory
principals to foster economic growth. SECP provides guidance to the new market entrants
and safe guards their rights. SECP acts as a regulatory body and monitors all economic
activities.
SECP Role in Pakistan’s Economic Growth
Economic growth of Pakistan can be increased by encouraging more companies to register
with the Securities and Exchange Commission of Pakistan. The economic growth of the
country is also dependent on the inflows of foreign capital from international corporate
sector and the SECP is keen to accommodate international companies though liberalization
of stringent restrictions.
In the past as well, the SECP has provided all assistance to the international corporate sector
in providing ease of starting and doing business and help the existing and prospective
foreign companies to expand their investment portfolios in Pakistan. However, SECP is
determined to create conducive environment for corporate sector to thrive and provide
level playing field to all stakeholders, especially the foreign investors. The SECP is engaging
with business leaders, who are the main stakeholder of the economy and without their
cooperation and support ambitious reforms agenda will not bear fruit.
SECP with the establishment of the initial products in the shape of pension funds authorized
under the Voluntary Pension System realizes that a robust system of Occupational Pensions
and Savings Schemes also needs to be established in a way that the system adds to the
social and financial stability of the country.
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Securities and Exchange Commission of Pakistan (SECP) while complementing the initiative
of the Honorable Supreme Court of Pakistan has issued a circular, encouraging companies to
contribute to the great national cause of building dams.
The SECP has motivated companies that as part of corporate social responsibility this
initiative will go a long way in resolving the water crisis being faced by the country. The
circular states that the construction of these dams will not only help in meeting the water
need in coming decades but will also increase the business activity leading to boom in the
corporate sector. Which will also result in the form of Economic Growth of the country.
Securities and Exchange Commission of Pakistan (SECP) Chairman Zafar Abdullah has said
that a strong linkage needs to be established between the real economy and the capital
market to develop the bond market in the country. The SECP chairman shared the outlook
of the SECP in the annual report-2017 released Friday.
In the report, Zafar Abdullah said that they need to introduce products like equity
derivatives, interest rate derivatives, agricultural commodity derivatives, electronic
warehouse receipt finance, etc. Such products would develop the real economy and
increase access to finance and improve price risk management. With a contemporary legal
framework and a revised structure in place, the SECP has the right platform and momentum
to steer Pakistan towards a brighter future.
The SECP needs to support the growth of agricultural produce companies by engaging with
all relevant stakeholders to create a comprehensive and modern policy framework. This will
allow it to play pivotal role in the development of the entire agriculture value chain. It is
expected that the new measures will aid in growth and employment, documentation of the
economy, building a connection between real economy and capital markets and increasing
tax revenues.
In the last three years, there have been many legal reforms and the SECP needs to educate
its regulated entities by creating awareness about these laws through different forums such
as conferences, seminars, media, etc. The incorporation rate needs to be increased by
bringing the unregistered entities in the corporate net thus propelling the economy towards
corporatization. Furthermore, efforts are also required for introducing tax incentives by the
government for encouraging corporatization, Zafar Abdullah said.
The financial results of the SECP for 2016-17 showed surplus of income over expenditure
after tax Rs 416 million as against last year's Rs 254 million, registering an increase of Rs 162
million (63%) over the last year. According to the details shared by Zafar Abdullah in its
annual report-2017 released here on Friday, total revenues (net of levies) for the financial
year 2016-17 are Rs 3,048 million which are higher by Rs 374 million (14 percent) as
compared to last year's revenue of Rs 2,675 million.
Finance Minister, Senator Mohammad Ishaq Dar urged Securities and Exchange Commission
of Pakistan (SECP) to take all necessary measures to ensure that the corporate sector and
capital markets of the country realize their full potential through adoption of international
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best practices. This would enable the country to achieve higher, inclusive and sustainable
economic growth, which is the main aimof the present government after having achieved
macroeconomic stability.
Relationship of SECP with Corporate Sector: -
The economic growth of the country is dependent on the inflows of foreign capital from
international corporate sector and the Securities and Exchange Commission of Pakistan
(SECP) is keen to accommodate international companies though liberalization of stringent
restrictions. SECP has provided all assistance to the international corporate sector in
providing ease of starting and doing business and help the existing and prospective foreign
companies to expand their investment portfolios in Pakistan.
However, SECP is determined to create conducive environment for corporate sector to
thrive and provide level playing field to all stakeholders, especially the foreign investors. The
SECP is engaging with business leaders, who are the main stakeholder of the economy and
without their cooperation and support ambitious reforms agenda will not bear fruit.
Enhanced checks and systematic changes to bring transparency to Pakistan Stock Exchange
(PSX) and brokerage firms has restored the confidence of investors, making Pakistan a
potential attraction not only for local, but also for foreign investors. The Pakistani capital
mark is fully geared to support the capital needs of the industry and shortly PSX will
introduce new products to meet the needs of the corporate sector, which has been highly
dependent on lending by banks.
The economic woes of the country cannot be addressed without creating conducive
environment for attracting foreign investment and providing competitive edge to Pakistan's
corporate sector and industry to grow and bridge the import and export gap. It is pertinent
to mention here that recently the SECP has taken number of steps to provide ease of
starting and doing business in Pakistan, such as considerably reducing the incorporation
time of companies, integration of systemwith the FBR and the government of Punjab etc.
More over statutory reporting requirements have been simplified, facilitation desks have
been set up at CROs and the IPO process has been revamped and simplified to assist the
corporate sector and investors.
Rules and Regulations: -
SECP has notified draft regulations regarding further issue of shares by companies.
Currently, companies issuing shares by way of right issue, bonus issue, other than right,
shares having differential rights & privileges, shares at discount or employee stock option
schemes are required to comply with the requirements of the Companies Act, 2017.
In addition to requirements of Act, compliance with applicable requirements of
Companies (Issue of Capital) Rules, 1996 and Guide on issue of shares otherwise than right
is mandatory. Similarly, companies issuing different kinds of shares with varied rights and
20. 20
privileges are required to comply with the requirements of the Act and Companies'' Share
Capital (Variation in Rights and Privileges) Rules, 2000.
SECP has proposed amendments to Non-Banking Finance Companies and Notified Entities
Regulations, 2008.
Under the regulations, an asset management company shall not enter, on behalf of a
collective investment scheme, into transactions with any broker that exceed fifteen percent
of the Commission payable by a collective investment scheme in any one accounting year.
Provided that this restriction shall not apply to transactions relating to money market
instruments or debt securities.
In this regard, the SECP has issued draft amendments to the Companies (Incorporation)
Regulations, 2017. Under the revised regulations, the SECP has placed additional
requirements for foreign subscribers and security clearance.
In case the subscriber is a foreign company or a foreign body corporate, the registrar shall
require additional information including but not limited to, the profile of the foreign
company or foreign body corporate, detail of its directors, their nationality and country of
origin, copy of its charter, statute or memorandum and articles.
Both on the international and domestic levels — over money laundering, the Securities and
Exchange Commission of Pakistan (SECP) has, for the first time, framed a set of regulations.
According to the new regulations, both NGOs and INGOs cannot directly or indirectly
participate in any political campaign for elective public office, or engage in activities akin to
those of a political party. They are also barred from funding political parties, individuals or
any other associations that may be set up for such purposes.
Although all NGOs are registered with the SECP under the Companies Ordinance 1984, there
was no complete set of regulations to oversee their conduct. The new regulations have been
formulated under the Companies Act 2017, and all NGOs registered with the Commission
must abide by them.
Conclusion
The Securities and Exchange Commission of Pakistan (SECP) has taken an aggressive lead in
strengthening the regulatory framework that protects investors’ interest. It is launching a
program to broaden the reach of the capital market investment products to savers across
the nation. It is accelerating regulatory approvals for listing of new companies, launching of
new products such as REITS (Real Estate Investment Trusts) and Government Debt Securities
secondary market trading.
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SECP has taken a lead in pushing forward with the launch of Small & Medium Enterprise
(SME) segments, said an official talking to his scribe. It was disclosed that after SECP
approved SME regulations for the Islamabad Stock Exchange in 2014 and now recently it
approved SME regulations for the Karachi Stock Exchange. These initiatives will lead to a
quantum increase in opportunity for small and medium businesses, which account for 90
percent employment generation in the country, to obtain funding for growth.