SECP to strengthen regulatory oversight

Securities and Exchange Commission of Pakistan will employ supervisory technology and improve inspection regime

ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) Chairman Aamir Khan has said that the commission has been focusing on strengthening its regulatory oversight and upgrading its surveillance capability by employing supervisory technology and improving the inspection regime.

Khan expressed these views while commenting on the SECP’s annual report for financial year 2018-19.

The report cites various measures that the apex regulator has taken to promote the corporate sector, capital markets, non-banking financial sector and insurance industry. It also includes SECP’s audited financial statements for 2018-19.

The SECP chairman, in his message in the report, stated that during the outgoing fiscal year the SECP was able to revamp numerous regulatory regimes and remove bottlenecks to the regulatory compliance requirements. “The SECP will also overhaul the system of asset custody for capital market investors,” he added.

“In the insurance sector, the focus will be on increasing penetration through compulsory insurance and development of a micro-insurance market while in the asset management sector, the SECP will pursue measures for enhancing investors’ outreach through the introduction of a centralised portal to efficiently address investor needs,” Khan emphasised.

The SECP chairman was of the view that these goals would be achieved through a multi-pronged strategy that would simplify regulatory requirements, energise frontline regulators and support product development.

Some of the key successful initiatives that the SECP report points out include switching from the mandatory code of corporate governance for listed companies to the one based on “comply or explain”, eliminating redundant disclosure requirements under Fourth and Fifth Schedules of the Companies Act 2017 and reduction of regulatory and supervisory costs in the insurance and non-banking finance company (NBFC) areas.

Moreover, investors were facilitated through the revamp of buyback regulations by relaxing requirements for share buyback by listed companies and regulatory relaxations for the non-banking financial sector through amendments in the Non-banking Finance Companies and Notified Entities Regulations 2008, said the report.

Furthermore, to facilitate small borrowers from the SME and agriculture sectors in securing credit from financial institutions, the SECP initiated work on establishing the Secured Transactions Registry (STR) for unincorporated entities.

SECP’s financial results for fiscal year 2018-19 show a surplus income of Rs148 million against previous year’s surplus of Rs302 million. Total revenue (net of levies) and other income was Rs3 billion.  

Published in The Express Tribune, March 3^rd, 2020.

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