Se­nate ap­proves SECP (Amend­ment) Bill 2016

The Pak Banker - - FRONT PAGE -

ISLAMABAD: The Se­nate has ap­proved the Se­cu­ri­ties and Ex­change Com­mis­sion of Pak­istan (Amend­ment) Bill, 2016, al­ready ap­proved by the Na­tional As­sem­bly with fur­ther Amend­ments ear­lier in May. The Bill will fa­cil­i­tate better su­per­in­ten­dence and con­trol over cap­i­tal and fi­nan­cial ser­vices mar­ket, cor­po­rate sec­tor and in­sur­ance in­dus­try bring­ing the SECP on a par with its in­ter­na­tional coun­ter­parts in the cap­i­tal mar­kets of the world. The new law is aimed to cover all the de­fi­cien­cies and short­com­ings in the ex­ist­ing law. The SECP suc­ceeded the Cor­po­rate Law Au­thor­ity (CLA) in 1999 as a uni­fied reg­u­la­tor of the cap­i­tal mar­kets and for su­per­in­ten­dence and con­trol of cor­po­rate en­ti­ties. How­ever, its man­date has con­tin­ued to be en­hanced through var­i­ous amend­ments, such as floata­tion, man­age­ment and reg­u­la­tion of modarabas (1999), in­sur­ance sec­tor (2000), non-bank­ing fi­nan­cial com­pa­nies sec­tor (2002), com­mod­ity fu­tures mar­ket (2003), real es­tate in­vest­ment trusts (2008), etc.

The law will meet the lo­cal and in­ter­na­tional re­quire­ments for the cor­po­rate sec­tor reg­u­la­tor, in­clud­ing the re­quire­ments of the In­ter­na­tional Or­ga­ni­za­tion of Se­cu­ri­ties Com­mis­sions (IOSCO). Ma­jor de­fi­cien­cies of the cur­rent law, i.e., SECP Act, 1997, in­clude lim­ited fi­nan­cial/ad­min­is­tra­tive in­de­pen­dence of the SECP, lack of pro­vi­sions on Act­ing Chair­man, power to con­sti­tute com­mit­tees, task forces, etc. and in­crease in the mem­ber­ship of the SECP Pol­icy Board. Be­sides, the SECP has in­ef­fec­tive en­force­ment pow­ers to call for in­for­ma­tion, lack of process for pros­e­cu­tion of cases, re­cov­ery of penalty, de­lay in de­ci­sion of court cases, ex parte stays and in­ad­e­quate in­ves­ti­ga­tion pow­ers. With amend­ments to the SECP Act, 1997, the law will, in­ter alia, en­tail pro­vi­sion for the ap­point­ment of Act­ing Chair­man along with pro­vi­sions stip­u­lat­ing the time frame i.e. 120 days from the date the post falls va­cant, for the ap­point­ment of the Chair­man of SECP and pri­vate sec­tor mem­ber of SECP Pol­icy Board. The Bill also aims to widen the scope of pow­ers and func­tions of the SECP per­tain­ing to, in­ter-alia, reg­u­la­tions and fa­cil­i­tat­ing growth of Shariah-com­pli­ant fi­nan­cial prod­ucts, heathy growth of the cor­po­rate sec­tor and to pro­mote good gov­er­nance; to cre­ate aware­ness amongst in­vestors and to pro­vide pro­tec­tion to in­vestors; en­sur­ing de­vel­op­ment of sound reg­u­la­tory frame­work to counter il­le­gal and un­fair prac­tices in fi­nan­cial ser­vices mar­ket; to con­trol and min­i­mize mar­ket abuse, mis­con­duct and fi­nan­cial crimes in fi­nan­cial ser­vices mar­ket and other sec­tors reg­u­lated by SECP etc.

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