LAHORE
The government has reassured the World Bank of further improvements in financial intermediation for strengthening the governance and transparency of capital markets through amendments to the Securities and Exchange Commission of Pakistan (SECP) Act.
In a letter, a copy of which is available with Pakistan Today, the government highlighted that since the promulgation of the SECP Act in 1997, the mandate provided to SECP has been enhanced by several legal reforms to empower and increase the scope of its regulatory and supervisory powers over the non-bank financial sector.
The communication indicates that it was initiated in the response of World Bank’s condition of a loan. The WB condition states, “In light of rapid and extensive changes in the SECP’s jurisdiction, there is a need to address gaps in the SECP Act especially in relation to the powers and functions of the Policy Board”.
The condition further demanded that the most critical gaps included (i) the inability of SECP to act as an integrated regulator; (ii) inadequacy of enforcement powers; (iii) lack of disciplinary process for regulated entities; (iv) the absence of an alternative dispute resolution mechanism; and (v) lack of adequate powers to recover dues and penalties.
The government also highlighted in its communication that an independent assessment by the International Organisation of Securities Commissions (IOSCO) proposed recommendations for amendments in the SECP Act to address these deficiencies.
In particular, the amendments aim to (i) ensure the administrative, financial and functional independence of SECP; (ii) improve governance of SECP’s Policy Board; (iii) regulate market conduct and investor protection practices; (iv) strengthen investigative, supervisory and punitive powers; (v) enable establishment of self-regulatory organisations; and (vi) facilitate international cooperation with foreign regulators.
The letter recollected the secured transaction, besides the amendment to the Credit Bureau Act.
The government has submitted to the National Assembly the Finance Bill FY16/17 which includes the third and final phasing out of discriminatory concessions granted through SROs.
“To attract private sector investment and remove entry barriers within the insurance sector: the National Assembly has passed the State Life Insurance Corporation (Re-organization and Conversion) Bill” it highlighted.
The letter says that federal board of revenue has started to implement a new audit policy that includes risk profiling of taxpayers for improved tax compliance by initiating forty comprehensive audits of large taxpayers, besides it has also improved debt management coordination through ministerial notification expanding the existing functions of Debt Policy Coordination Office and publication of the approved medium term debt management strategy FY 2015/16 – 2018/19.
It further pointed out that in order to strengthen targeting of safety-net programs, the federal government, through its ministry of finance, has authorised BISP to update the National Socio-Economic Registry with dynamic updating of the registry going forward, in accordance with a plan submitted by BISP.
It concluded by mentioning that ministry of finance has implemented a new directive requiring the annual collection and publication of key financial information of all state-owned entities by publishing the first report on the ministry of finance’s website.
