SECP policy board seeks ways to protect stock investors

Asks brokers to reach out to wider investor base by setting up branches

ISLAMABAD: The Securities and Exchange Policy Board of the Securities and Exchange Commission of Pakistan (SECP), following recommendations of its regulation committee, has referred proposed amendments to different laws to the Ministry of Finance for approval.

The policy board, which met at the SECP head office under the chairmanship of Khalid Mirza, discussed the progress made by the SECP in relation to the decisions taken to facilitate the stock market, ensure ease of doing business and reduce fee across the board.

SECP Chairman Farrukh Sabzwari, who was inducted into the policy board recently, vowed to get the work done at a rapid pace. In the meeting, Pakistan Business Council CEO Ehsan Malik gave a presentation, pointing out various anomalies and difficulties in the Companies Act 2017. These include Section 452, which deals with the global register of beneficial ownership of shareholding in foreign companies, Section 208, which is related to party transactions, as well as other provisions.

The policy board directed the SECP to investigate such matters and ensure necessary rectification in a swift manner.

On the occasion, the Pakistan Stockbrokers Association highlighted the issues faced by the brokers such as the removal of small brokers from the category of public-interest companies, making it mandatory for them to meet high compliance requirements, and the simplification of account opening forms.

The board was of the view that small brokers would find it difficult to perform the role required from them unless there were substantial mergers in their ranks, giving them the capability to face competition and professionalism of large brokerage houses.

At the same time, the stockbrokers association was asked to suggest ways to improve investor protection, reach out to a wider investor base through branches, set up in-house research facilities and automate their systems. The board stressed the need for improving the capacity of SECP employees and assessment of workload and training needs. It was decided that the board's human resources committee would provide assistance in that regard.

Published in The Express Tribune, February 2^nd, 2019.

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