‘Transparency can improve Pakistani capital markets’

KARACHI: A government committee has emphasised on the need of transparency and accountability for the improvement and development of the capital markets in Pakistan
Securities and Exchange Commission of Pakistan’s (SECP) Consultative Group, which was formed to recommend the way forward for the development of capital markets in Pakistan, held its first meeting on Thursday.
There is need for structural reforms for market infrastructure institutions, including the clearing house’ central counterparty status and establishment of a settlement guarantee fund for an efficient risk and default management regime as per international best practices, the committee agreed.
During the discussions, various proposals and suggestions were put forward by group members regarding market development and restoration of investor confidence. There was a consensus for the need to step up efforts on market development initiatives for promotion of various market segments.
The meeting emphasised that the SECP, as the apex regulator, and the stock exchanges, as front line regulators, shared the same vision of making Pakistan’s capital markets vibrant, transparent and effective regional markets. It was further highlighted that the SECP had embarked on a comprehensive reforms agenda for the capital markets, which would require extensive efforts and support from other stakeholders for effective implementation.
In order to restore investors’ confidence and to minimise chance of misuse of investors’ assets, it was agreed that necessary measures should be taken to ensure segregation of clients’ assets from brokers’ assets. Also, investor education and outreach were chalked out as important areas for coordinated efforts by all stakeholders, considering the meagre quantum of general public which invests in the capital market.