CapitalMarketPresentation.pptx

8/17/2019 CapitalMarketPresentation.pptx

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Securities and Exchange Commission of Pakistan

Securities andExchange Commission

of Pakistan

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Contents

Introduction to the Capital Market:

Regulated Entities & Market Infrastructure Institutions

Steps for Investors and Requirements for rokers

!rder "lo#

Ma$or Market Reforms

Stock Market

Commodit% "utures Market

e't Market

"uture Plans

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The Capital Market – An Introduction

( capital market is a market for securities )de't or equit%*+ #here'usiness enterprises )companies* and governments can raise long,term funds- It is defined as a market in #hich mone% is provided forperiods longer than a %ear-

(1) Primar% Market

The market for new shares of securities. A primary market is one in whicha company issues new securities in e chan!e for cash from an in"estor(#uyer).

(2) Secondar% Market

$nce new securities ha"e #een sold in the primary market% an efficientmanner must e ist for their resale. &econdary markets !i"e in"estors themeans to resell' trade e istin! securities.


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Capital Market Instruments )a* Equities

• Common stock'$rdinary shares• referred stock

)'* "ixed Income• Corporate #onds'T*Cs

)c* erivatives Market

• &tock + Inde *utures• &tock and Inde $ptions

)d* Exchange .raded "unds

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-

Entities Regulated '% SECP• Stock Exchanges• Commodit% Exchange• epositor% Compan%• Clearing Compan%• rokers and (gents• /nder#riters• alloters• Credit Rating Companies• Consultant to the Issue• Share registrars


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The Capital Market Institutions

0arachi Stock Exchange )1* 2td esta'lished in 3456

2ahore Stock Exchange )1* 2td esta'lished in 3467

Islama'ad Stock Exchange )1* 2td esta'lished in3484

Central epositor% Compan% of Pakistan 2imitedesta'lished in 3446

9ational Clearing Compan% of Pakistan 2imitedesta'lished in 773

Pakistan Mercantile Exchange 2td- )formerl% 9CE2*esta'lished in 77 and operations started in 776


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The Capital Market Intermediaries

/

Mem'ers )stock & commodit%*

Stock rokers & Commodit% rokers

Clearing;Settling anks

(gents

9CCP2 Clearing Mem'ers ) rokers and 9onrokers*

C S Participants


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Securities and Exchange Commission of Pakistan 0

&ystems and rocesses

Pre,.radeRisk

Management

.rading

Post .radeRisk

ManagementClearing and

Settlement

epositor%


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Market ntry #y In"estors

Investor

Stock Market

Broker


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&teps for an In"estor

Making an !rder

eposit of Margins

Mapping of /I9

!pening of (ccount in C S

(llotment of (ccount 9um'er & .rading Code

(greement #ith roker;!pening of (ccount #ith roker

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4e5uirements for 6rokers

Mem#er of an chan!e

articipant in C7C

Clearin! Mem#er in 8CC 9

4e!istered with & C as 6roker

Tradin! Terminal

Mar!in and posures

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:arachi &tock chan!e

;o"ernance &tructure – 6oard + Committees% 4e!ulationsof Constitution of the 6oard% ;eneral 4e!ulations +

Articles.

Mem#er Conduct 4e!ulations – ;eneral% roprietaryTradin!% 4isk Mana!ement% Market Makin!% 7efault

Mana!ement% 6ranch $ffice% &ystem Audit% &hort &ellin!etc.

Market Conduct 4e!ulations – &eparate 4e!ulations foreach market se!ment< 7eli"era#le% Cash=&ettled% Inde*utures% Inde $ptions% T*s% 6AT&% etc.

Issuers – 9istin! 4e!ulations

In"estors – address complaints'dispute resolution

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:& ro!ress

2006 2007 2008 200 20!0 20!! 20!2

"um#er of $istedCom%anies

652 654 653 651 644 638 591

&ota' $isted Ca%ita'( )s* B'n

519 671 750 814 919 1,048 1,058

&ota' MarketCa%ita'i+ation ( )s*B'n

2,771 4,330 1,859 2,706

3,268 2,945 3,572

,SE(!00 Index10,04

114,07

65,865 9,38

712,02

211,347 13,928

>Figures for 2012 taken as of April 19, 2012.**All other figures have been taken as of December 31 st of each ear

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M(R0E. SE1ME9.S

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1-

!rder


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8ational Clearin! Company of akistan 9td.

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!rder


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Central 7epository Company of akistan 9td.

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M-./) M-),E&)E /)MS


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)E /)M P)/CESS to achieve market integrity - a fair,transparent, and e cient market that engenders investorcon dence

&rans%arenc1Measures

Abolished disclosed trading tocurb front running“Blan sales! re"laced b#regulated “short selling$%tandardi&ed Account '"ening(or) for bro erage houses anda standardi&ed sub*accounto"ening for) for + + ha-ebeen introduced.n*house Badla /hich /as anon*trans"arent )ethod of

nancing has been abolished

.ntroduction of ni ue

.denti cation u)ber .

.nternet rading egulationsolic# for dealing /ith

defunct defaulter co)"anies

overnance Issues.nde"endent +hair)an and reco)"osition of board(it : "ro"er criteria fordirectorsBro ers of stoc e;changescannot sit on board of listed

co)"aniese-a)"ed %#ste) Audit+ode of +or"orate ?andator# re"orting of '@ ?ar et ransactions

?andator# use of ban ingchannels abo-e s 25,000.ntroduction of Coint "roceduresto be follo/ed in case ofe;"ulsion sus"ension

estriction on bro ers tradingthrough other bro ers of thesa)e e;change


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)E /)M P)/CESS**continued

)isk ManagementDA based ?argining egi)e

osition Ei)its Across ?ar etsDaluation of %ecuritiesde"osited as +ollateral?ar *to ?ar et loss collection+lient*Ee-el etting egi)e

+oncentration and li uidit#)argins1 st da# circuit brea ers 50For s 5 /hiche-er is higher.ntroduction of unifor)eligibilit# criteria for

eli-erable (utures, +ash%ettled (utures and ?argin

rading ?ar et. % : (. ?%

/ther Measurese-elo")ent of ' + )ar et

.ntroduction of +ash %ettled(utures and inde; (uture+ontracts.ntroduction of G2>

e-elo")ent of free Hoatinde;.ntroduction of .sla)ic .nde;.ncrease in . ( contributionli)itAuto)ation of %ecurities%ettle)ent "roCectBA %

egulator# fra)e/or for

)argin nancing, )argintrading, securities lending andborro/ing and "ledging ofclients= securitiesA?E +( egi)e.ntroduction of I (s.ntroduction of .nde; '"tions


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Commodities Market 4eforms

Mandatory re!istration of all M ? mem#ers as #rokers.

8ew commodities futures contract introduced at M ?includin!% cotton% wheat% su!ar% "aryin! si@es of !old% sil"erand crude oil etc.

Introduction of 4e!ulations for implementin! the concept ofMarket Makers.

*it and roper Criteria for 7irectors on the 6oard of M ?.

Maintenance of minimum net worth re5uirements andintroduction of capital ade5uacy re5uirements similar to those

of the stock e chan!es.ni"ersal and &pecific Mem#erships.

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7e#t Market 4eforms

6onds Automated Tradin! &ystem introduced at chan!esBplatform in line with international standards and 6loom#er! #ased

=#ond systemImplemented "arious recommendations made #y the 6AT&4e"iew Committee for re"ampin! the re!ulatory and operationalframework for tradin! of de#t securities in line with international#est practicesCentrali@ed reportin! of all unlisted T*Cs at 8CC 9The rate of stamp duty on the issuance of corporate #onds andtransfer of assets in case of securiti@ation was reduced

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uture P'ans

Corporati@ation and 7emutuali@ation of the stock e chan!es

4o#ust 4e!ulatory *ramework in line with International 6estractices and International $r!ani@ation of &ecurities 4e!ulators

(I$&C$) rinciples for the Capital Market (& C Act% *uturesTradin! Act and &ecurities Act)&e!re!ation of 4oles of the & C and the *rontline 4e!ulators

Transfer of 4isk Mana!ement from the &tock chan!es to8CC 9

na#le 8CC 9 to *unction as a Central Counter arty (CC )and sta#lish CC &ettlement ;uarantee *und*ormulate re!ulations for the Issuance of &ukuk Certificates7e"elop re!ulations for the Issuance of Call arrants

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uture P'ans

Dold 4oad &hows% Awareness Campai!ns' ducational &eminars and

u#lish 4eadin! Material and mploy &peciali@ed Institutions to Carryout :nowled!e 6uildin! Acti"ities

Measures to de"elop retail demand throu!h enhanced outreach

Measures to Increase 7epository $utreach

7e"elop code of conduct for ar#itratorsImplementation of re"ised 6roker 4e!ime< incorporatin! impro"edCapital Ade5uacy 4e5uirements% Code of Conduct and *it + roperCriteria for #rokers% ntry 4e5uirements for mem#ers of stocke chan!es% appointment of Compliance $fficers and 4isk Mana!ers #y#rokers and linkin! of tradin! acti"ities with financial stren!th of #rokers

&e!re!ation of Tradin!% Clearin! and Custodial *unctions of MarketIntermediaries

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uture P'ans

Implementation of inde #ased market halts

Implement effecti"e :EC and C77 policies and proceduresIntroduction of e=di"idend and e="otin! mechanisms

Introduction of & A8 (&tandardi@ed ortfolio Analysis of 4isk) Mar!inin!&ystem

7e"elop re!ulatory framework for inter=e chan!e tradesCross listin! of Indices

Introduction of lar!e cap and small cap listin! #oards so as to encoura!elistin! of small capital #ased companies and study esta#lishment of &M6oard' chan!e

ork towards shiftin! to 133F demat for I $s

7e"elopment of electronic'online I $ application

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uture P'ans

?easures for ebt ?ar et e-elo")ent

egulator# changes for listing of debtsecurities of unlisted co)"anies

ationali&e docu)ents for listing of (+s debt )ar et securities

e-a)"ing of credit rating regulator#fra)e/orEisting of


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uture P'ans

Istablish)ent of a %hariah Board

%hariah*co)"liant in-est)ent alternati-es,consolidation of e;isting .sla)ic institutionsand de-elo")ent of inno-ati-e %hariah

co)"liant institutions, "roducts and ser-ices(ocus on creating a -iable )ar et for thee@ecti-e )obili&ation of .sla)ic funds

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Securities and Exchange Commission of Pakistan 20

Thank you.

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CapitalMarketPresentation.pptx