ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has released its annual report for the financial year 2021-22, highlighting reforms introduced in the capital market and the corporate sector for enhancing efficiency, transparency, depth and ease for the investors.
In his message published in the report SECP Chairman Aamir Khan expressed satisfaction that the Commission has achieved significant progress in multiple areas to support innovation, entrepreneurship and market development.
Mr Khan said that promoting digitalisation, simplifying regulatory structure, reducing cost of compliance and invigorating the exchange of ideas have been the basis to pursue developmental reforms.
During the year SECP automated the process for submitting IPO applications by the issuers, as the opening of news accounts by small investors has been simplified through a new category of “Sehl Account”, allowing the investors to be on-boarded through microfinance banks backed by telecom providers.
Among the new initiatives and achievement of frameworks that the commission had been planning for some time includes starting of the “Digital mortgage certificates and statutory returns”. The SECP has started issuance of digital mortgage certificates and acknowledgement of annual and other returns which is equivalent to the physical certificate for all legal purposes.
The other such achievements includes “Online portal for companies’ easy exit” which is aimed at automated and simplified processes of easy exit. A private or public unlisted company which ceases to operate and has no known assets and liabilities, may apply directly to the registrar to strike its name off the register of companies through a simplified way instead of submitting a winding up petition to the court.
The “Digital portal for banks” launched in coordination with the state bank, in March 2021, the portal became fully functional in the fiscal 2021-22, enabling all banks to open corporate accounts without seeking physically certified copies of statutory documents from its customers.
“Automation of Public Subscription Process,” through enhanced accessibility, the automation of public subscription process has resulted in addition of 5,835 new retails investors, “Operationalisation of PCM Pursuant to the launch of first Professional Clearing Member (PCM)” allows the trading-only brokers have been successfully on-boarded to provide custody and settlement services through PCM.
“Amendments to the Companies (Further Issue of Shares) Regulations, 2020” allows companies to convert from one class of shares into another class, issue shares with differential rights without approval of SECP, and provide a mechanism for valuation of non-cash assets.
During the last fiscal the SECP has centralized the licensing function to standardize and streamline regulatory approvals through a unified department to handle all licensing applications.
The consolidation of operations is expected to promote consistent decision-making, leading to improved user experience.
In September 2021, Special Purpose Acquisition Companies Public Offering Regulations, 2017 were amended allowing capital market professionals to issue securities and raise capital by forming a special purpose company for entering into merger or acquisition transactions.
“Market making for debt securities” and the regulator has allowed financial institutions including Banks, DFIs, PDs, AMCs etc. to act as market makers, as a result increasing secondary debt market liquidity and 16 financial institutions have been registered as market makers.
The SECP also awarded the first NBFC license to operate as a people to people (P2P) lending platform on a commercial basis.
