SECP to focus on debt and commodity markets: Chairman

KARACHI: Securities and Exchange Commission of Pakistan (SECP) Chairman Muhammad Ali disclosed that the apex regulator is making sweeping changes to the bonds automated trading system (BATS). “By the end of April, BATS will be as good a trading platform as any used in the regional markets,” he added.

Talking exclusively to The Express Tribune, he explained that the changes will enhance risk mitigation and address transparency issues in the current system. Ali revealed, “SECP has been working on the concept of developing an independent bond pricing agency for the past two months.” He explained that at present, the function is being performed by the Mutual Funds Association of Pakistan (MUFAP), adding that an independent agency for the task would instill greater confidence amongst stakeholders. He also called on the government to use the bond market for its financing needs, adding that SECP will focus on the development of debt, commodities and mutual funds in coming months.

“A committee comprising representatives from each of the three stock exchanges, SECP and National Clearing Company of Pakistan (NCCPL) has been constituted to suggest improvements to the margin trading system,” said the apex regulator. Ali explained that the introduction of three products – margin trading, financing, and securities lending and borrowing – will provide diverse options for market participants. “MTS has controls on the client, broker, as well as scrip level and disclosure methods are superior to those in place under the continuous financing system (CFS MKII).

SECP called on the government to speed up the implementation of Futures Act and Demutualization Act to help develop the equity markets.

Published in The Express Tribune, March 6^th, 2011.