SECP approves revision in tariff structures of NCCPL, CDC

Reduction will minimise investor-related costs in equity, debt markets

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has approved revisions in tariff structures of National Clearing Company of Pakistan Limited (NCCPL) and Central Depository Company of Pakistan Limited (CDC) in order to foster development of the capital market and broaden the investor base.

“The reduction in regulatory charges will further minimise investor-related costs in different segments of equity and debt markets and make them more competitive investment avenues,” the SECP said in a statement.

The SECP stressed that it was striving to introduce measures for simplifying and reducing the cost of doing business to facilitate investors and bring confidence to the capital market in Pakistan.

The SECP had advised CDC and NCCPL to rationalise their respective tariff structures in line with international best practices.

In order to give maximum benefit to shareholders and encourage investment, the board of directors of both companies has issued Statutory Regulatory Orders (SROs), announcing a significant reduction in the tariff structures.

As per revised tariff structures, the sub-account maintenance fee for the sub-account holders maintaining investor accounts with CDC has been waived. “This will encourage investors to open sub-accounts with CDC for a prudent and safe custody of their investment,” the SECP said.

Tariffs on annual fee of redeemable securities have been substantially reduced by almost 70% in order to provide support to the corporate debt market.

Furthermore, the SECP has approved reduction in the custody fee for next two years by 14% and 16% for 2020 and 2021 respectively.

In addition to these, the SECP has advised CDC to reduce the ceiling on the fresh issuance fee for issuers to Rs35 million from Rs50 million.

Moreover, the NCCPL has reduced the fee and other charges for collective investment schemes (CIS). “The reduction will directly benefit mutual fund unit holders as it will reduce the expense ratio of a fund significantly,” the SECP said.

NCCPL has also reduced the Unique Identification Number (UIN) maintenance fee by 50%. Besides, a 20% reduction has been announced in the monthly institutional delivery system (IDS) fixed fee and IDS transaction fee for CIS. The annual capital gains tax fee has been reduced for small local investors.

In order to improve volumes in the leveraged market, the margin financing transaction fee, applicable on finances, has been abolished.

Published in The Express Tribune, September 24^th, 2019.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.