Need to reform private equity market rules discussed

KARACHI: Industry leaders have advocated the need to reform private equity market regulations in Pakistan and agreed to further liberalise the regulations at a roundtable organised by USAID’s Financial Market Development (FMD) in collaboration with the Securities and Exchange Commission of Pakistan (SECP).

The roundtable, attended by chief executive officers from over 30 investment companies, provident and retirement funds, insurance companies and asset management funds, discussed private equity market regulations in Pakistan.

Recognising the need for inclusive reforms in the current regulations, SECP Executive Director Imran Inayat Butt said, “We are here to listen to what the key market players have to say. The reform process is going to be a gradual process driven by the market players.”

Echoing the sentiment, FMD Senior Legal Expert Muneeb Zia shared that the proposal for reforms was updated based on the two previous discussions. The participants were of the view that private equity market required developmental and promotional measures, while policy and regulatory institutions could play a pivotal role in the development of private equity market.

The meeting proposed that SECP might allow provident funds and pension funds to invest in private equity funds subject to prudential limit, the SBP should allow general permission to all inward and outward remittances of securities price, and authorised forex dealers should be allowed to determine the validity of transactions and justification for securities prices at premium or discount.

The roundtable is a part of a series of discussions being held to ensure consensus based approach to regulations reform. Over the next few weeks, SECP and FMD have also planned a consultative roundtable for market participants in Lahore.

USAID’s FMD activity is a multiyear project to assist and promote the development of competitive and diversified debt capital markets in Pakistan.

The project supports the government of Pakistan in strengthening domestic debt security issuances, improve regulatory frameworks for efficient debt capital markets as well as promote trading and secondary markets.