SECP frames rules to reduce agriculture market imperfection

Salient features include licensing conditions, financial resource requirements

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has formulated collateral management companies (Establishment and Operations) regulations, 2017, under the Companies Ordinance, 1984.

In devising the framework, the SECP carried out consultative sessions with major stakeholders, including provincial departments of agriculture, State Bank of Pakistan, Central Depository Company, Pakistan Agriculture Coalition, Pakistan Mercantile Exchange, and others.

According to the SECP press statement, collateral management is one of the core areas in the National Financial Inclusion Strategy and it was envisaged to remove distortions, reduce market imperfections, avoid waste and help farmers get the best possible price for their produce while enabling banks to confidently lend against agricultural produce.

The SECP was endeavoring to promote electronic trading and warehouse receipt financing of agricultural commodities through the platform of Pakistan Mercantile Exchange to enable the growers to get a fair price for their produce, avail financing facilities and promote an efficient payment system, it added.

The salient features of the regulations are licensing conditions and financial resource requirements for collateral management company, duties of a collateral management company and the warehouse operator.

Published in The Express Tribune, May 5^th, 2017.

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