SECP

• Hassan Abbas• Hafiz Islam Aslam• Muhammad Suleman

Group Members

Presentation Outline• What is SECP• History• SECP Mandate• Organizational Structure of SECP• Data and Information at SECP• Users of SECP Data• SECP and 18th Amendment

• Commission (Formation)• Division of SECP• International Relationship Status• Policy Board• Members of Policy Board• Powers and Functions of Commission

• Powers and Function of Policy Board

Introduction

• The SECP is a government agency falls under Ministry of Finance

• Its purpose is to develop a modern and efficient – corporate sector and a capital market based on sound regulatory

principles, – to foster economic growth and prosperity in Pakistan.

History

• The Securities and Exchange Commission of Pakistan was created to succeed the Corporate Law Authority (CLA).

• CLA was restructured under the Capital Market Development Plan of the Asian Development Bank (ADB).

• A Securities and Exchange Commission of Pakistan Act was passed by the Parliament and promulgated in December 1997.

• Act becomes operational on January 1 1999.

SECP’s Mandate• Commission's mandate includes

Investment Financial Services, Leasing Companies, Housing Finance Services, Venture Capital Investment, Discounting Services, Investment Advisory Services, Real Estate Investment Companies and Asset Management Services.

• The Commission also regulates various external service providers

Chartered Accountants, Rating Agencies, etc.

Organization Structure of SECP

• SECP holds data and information of over 57,689 registered companies registered with SECP up to December 31st,2010.

• Nature and type of information being compiled and stored is largely inline with needs and requirements of SECP and its major departments.1. Registration2. Enforcement3. Securities Market & Surveillance4. NBFC5. Insurance 6. Finance & Administration

Data and Information at the SECP

• Various types of IT applications have been implemented and are under development by the SECP to capture data/information, and promote IT use.

• Some examples of the systems in place are:1. Company Registration and Compliance System – Registration

Department2. Enforcement & Monitoring System – Enforcement Department3. Regulatory and Compliance System for NBFCs - NBFC4. Regulatory System for Insurance - Insurance5. Brokers and Agents Registration and Management System –

Securities Market6. CRCS Company Registration and Compliance System for Online

registration and filing system

Data and Information at the SECP

• Users and stakeholders of SECP data range from

1. Government organizations and ministries 2. Private companies3. State Bank of Pakistan 4. FBR5. Federal Bureau of Statistics6. Credit Rating Agencies7. Students for Research

Users SECP Data

Status after 18th amendment to the 1973 constitution of Pakistan

• 18th amendment’s concurrent legislative list. subject 6 to 11 and 26 to 28 of the list deal with corporate law, registration and regulation, it is expected that the SECP will be disbanded once the 18th amendment becomes law

HAFIZ ISLAM ASLAM

• The work of the Commission has been distributed amongst its six divisions, each of which is headed by an Executive Director and divided into Wings for effective administration. The Divisions are:

• Securities Market Division• Specialized Companies• Company Law Administration Division• Enforcement Division• Insurance Division• Support Services Division

Division of SECP

Division of SECP

• Securities Market Division

The Securities Market Division (SMD) is responsible for regulation

of all aspects of the securities market. • Brokers and registration• Market Monitoring and Surveillance• Investor Complaints• Beneficial Ownership• Capital Issues• Stock Exchange

Division of SECP

• Enforcement and Monitoring Division • Accounts

• Investigation

• Compliance and Prosecution

• Company Law Administration Division

• Coordination and Liaison

• Regulation and Compliance

• Enforcement, Investigation and Prosecution

• Licensing, Approvals and Appeals

Division of SECP

•Insurance Division

• Actuarial Services

• Life Insurance Prudential Supervision

• Non-life Insurance Prudential Supervision

• Market Conduct Supervision

• Enforcement and Prosecution

•Support Services Division

• Human Resource

• Administration

• Finance and Accounts

Division of SECP

• Specialized Companies DivisionThe Specialized Companies Division (SCD) is responsible

for regulation of leasing companies, modarba companies, mutual funds and other specialized companies (except insurance companies). Its functions include licensing, monitoring, regulatory compliance and enforcement of all applicable laws.

• Leasing

• Modarba companies

• Mutual funds and other specialized companies

International Status

• SECP has been playing an active role in the activities of International Organization of Securities Commissions

• To cooperate together to promote high standards of regulation

• To exchange information on their respective experiences in order to promote the development of domestic markets

• To unite their efforts to establish standards and an effective surveillance of international securities transactions

Securities and Exchange Policy Board

Main objective of the Policy Board is to provide guidance to the Commission in all matters

Relating to its functions and to formulate policies in consultation with the Commission

Policy Board is also responsible for advising the Government on matters falling within the purview of the Act and other corporate laws

• Policy Board consist of a maximum of nine members appointed by the Federal Government

• Five ex-officio members and four from the private sector• Ex-officio members are

• Secretary, Finance Division; • Secretary, Law and Justice Division; • Secretary, Commerce Division; • Chairman of the Commission; and • Deputy Governor of the State Bank of Pakistan (SBP)

Policy Board Members

Commissioners

1. Establishment of Commission

2. The Commissioners• Shall consist of not less than five and more than seven• The majority shall always be of private sector persons• Conduct its proceeding in accordance with the regulation made by the commission• Shall be paid remuneration and allowances determine & approved by the board

Commissioners (cont’d)

3. The Chairman• One of the commissioner as chairman and not more than two consecutive terms.

4. CEO of the commission• Responsible for day to day affairs of the commission.

MUHAMMAD SULEMAN

Powers and Functions • Powers:

– The ability to do something or act in a particular way is called powers.

• Functions: – Work or operate in a proper or particular way is known as

functions.

Powers of Commission

• Commission shall have all the powers which are necessary to perform its duties,– The Commission may check all matters time to time,

identify the matters requiring the Board to make polices and decisions.

– May control issue of securities by law.– Commission have power to control all the corporate

bodies and cancel registration of any body with legal reason.

Functions of Commission

– Regulating the issue of securities.– Regulating the business in Stock Exchanges and any

other securities markets.– supervising and monitoring the activities of any

central depository.– supervising and monitoring Stock Exchange, clearing

house.


– Registering and regulating the working of stock brokers, sub-brokers, share transfer agents, underwriters, and such other intermediaries who may be associated with the securities markets in any manner.

– Proposing regulations for the registration and regulating the working of Collective Investment schemes.

A collective investment scheme is a way of investing money with others to participate in a wider

range of investments.

Professional buyer and sellers

Person not being a member of a stock

exchange but acts on behalf of a stock-broker

as an agent


– Commission also conduct investigations in respect of matters related to the Ordinance.

– Considering to reforms law and commission also give suggestions to make changes in rules relating to companies and bodies corporate.

– Promoting investors education and training of intermediaries of securities markets;


– Encouraging the organized development of the capital market and the corporate sector in Pakistan.

– Commission give approvals if,1. All public companies incorporate in Pakistan and want

issue their securities outside of Pakistan.

2. Companies incorporate outside of Pakistan and want to issue their securities in Pakistan.

3. All bodies incorporate outside of Pakistan and already listed in stock exchange of Pakistan and want to issue

additional securities.

Board

Commission Board:

Board is the selected members of the commission appointed by the Federal Government. Board also make policies for commission and pass it from Federal Government and impose on commission.

Board CommissionFederal

Government

Powers and Functions of Board

• Board after consultation with the Commission

Advice to the federal government.• Establish the policy of the Commission and

monitor and oversee its implementation.• Express its opinion in writing on any policy

matter referred to it by the Federal Government or the Commission

Powers and Functions of Board

• Monitor and oversee the Commissioner’s management of the Commission ensuring that,1. The Commission’s resources are utilized

economically and efficiently.

2. The Commission is operated in accordance with principles of board or federal government.

3. The Commission fulfils its statutory obligations and properly discharges its functions

• Approve (with or without modification) the budget for each financial year of Commission, prepared and submitted to the Federal Government .

• And perform all the instruction, instructed by Federal Government.

Documents

SECP