Finance minister consults with financial markets about bringing investment through Private Funds

KARACHI: The caretaker Federal Minister for Finance, Revenue, and Economic Affairs, Dr. Shamshad Akhtar, chaired a meeting with the chairman of the Securities Exchange Commission of Pakistan (SECP), bankers and heads of development finance. The meeting was held by the Securities and Exchange Commission of Pakistan (SECP) to discuss proposals for establishing financial institutions backed by private funds 

In the meeting, she stated that capital market reforms are a critical component of the caretaker government’s economic revival program. She said that the initiatives are aimed to promote growth and development by harnessing the potential of capital market institutions to diversify sources of financing and exploiting innovative financing modalities. 

Agreeing to the chair, bankers and Development Finance Institutions (DFIs) agreed on the need for establishment of private equity and venture funds to serve as a catalyst for economic revival. 

Chairman SECP reinforced the commitment to creating an enabling regulatory environment. The finance minister appreciated SECPs active engagement and encouraged banks and DFIs to set the stage for this collaborative effort and fast track the setting up of the private funds to support industrial development.

Dr. Shamshad Akhtar asked the fiscal and regulatory sides, including the Federal Board of Revenue, the State Bank of Pakistan, and the SECP, to extend complete support to the initiatives that sought investments from local financial institutions, institutional investors, government DFIs, and corporate entities with the potential to attract foreign capital.

Dr. Shamshad suggested making efforts, particularly to attract climate and ESG-focused international institutional investors. She stressed the urgency of implementing these initiatives to signal Pakistan’s readiness for business and economic growth to the global market and foreign investors.

Habib Bank Limited, representing a consortium of banks, proposed the establishment of a Climate Resilience (CR) Fund under the SECP Private Fund Regulations, 2015. The DFIs tabled the proposal for setting up a similar fund backed by DFIs. Whereas, Bank Al Falah presented a promising proposal to create a Special Purpose Vehicle (SPV) under the Asset Backed Securitization Regulations, 2022 to securitize rupee denominated debt to dollar denomination.

Finance minister appreciated these initiatives for seeking investments from local financial institutions, institutional investors, government DFIs, and corporates, with the potential to attract foreign capital, particularly from climate and ESG-focused international institutional investors.

She emphasized that time is of the essence and hectic efforts should be made to bring these propositions to fruition. She underscored that these ground-breaking initiatives will contribute to restoring market confidence and will send a clear message to the global market and foreign investors that Pakistan is open for business and poised for economic growth. Moving forward collaboratively, there will be an effort to remove the impediments facing the establishment of these funds.

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