SECP commits fresh reforms to shore up capital market

ISLAMABAD: Chairman Securities and Exchange Commission of Pakistan (SECP) Farrukh Sabzwari on Friday assured the stakeholders of his as well the corporate regulator’s continued support in introducing reforms for supporting growth and stability in the capital market.

A statement said Sabzwari, along with his team, met with capital market players, senior managements of Pakistan Stock Exchange, National Clearing Company of Pakistan Limited, Central Depository Company of Pakistan Limited, Mutual Funds Association of Pakistan, insurance companies, and brokers.

The chairman informed the participants that a shariah-compliant financing product with the name of Murabaha Share Financing was being finalised.

It was noted that Shariah-compliant segment has tremendous potential and the subject product would assist in promoting and developing this key sector of the market.

During the meetings, the existing capital market trend and issues faced by market participants were discussed in detail.

The participants highlighted the practical problems being faced in executing blank sales in the deliverable futures market, and it was agreed that the regulatory requirements would be reviewed in the light of international practices to resolve any genuine concerns, address practical issues and to ensure more accurate dissemination of relevant information to the stakeholders.

As a consequence of the meetings, the SECP got the issue of trade modification charges in the deliverable futures market resolved.

The participants also highlighted the need for a capital market support fund, which can assist in bringing desired liquidity to the market and restore investor confidence. It was noted that performance of stock market is closely linked with macroeconomic factors and once economic stability measures are in place it is expected that the same would have a positive impact on the capital markets.

The participants appreciated the Listed Companies (Buy Back of Shares) Regulations issued by the SECP for public consultation and opined that such legal reform is in the interest of stakeholders, would provide additional avenues for capital management and in line with best practices across the globe.

To this, the SECP chairman said the regulations were under review in the light of feedback received from market participants and assured the stakeholders that the final regulations would be expeditiously disseminated to the market.