Establishment of Securities and Exchange Commission of Pakistan
The Securities and Exchange Commission of Pakistan (SEC) has succeeded the Corporate Law Authority (CLA) which had been administering the corporate laws in the country since 1981. The Authority was a government department attached to the Ministry of Finance and therefore lacked the financial and administrative autonomy required to build a regulatory structure conducive to the growth of the financial sector. Due to its typical bureaucratic structure, it was difficult for the CLA to effectively pursue transparency, disclosure and authenticity, and establish an upright financial sector. The rapid expansion of the market during the early 1990’s further highlighted the need for the establishment of an independent regulatory body with full operational and administrative autonomy. The process of restructuring the Authority was initiated in 1997 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. In pursuance of this Act, the Securities and Exchange Commission of Pakistan, having autonomous status, became operational from January 1st 1999. The establishment of the SEC is an important milestone in the evolution of the regulatory framework for the capital market in Pakistan. The policy decisions regarding the constitution and structure of the Commission were incorporated in the 1997 Act. Powers of the Commission have been delegated to the individual Commissioners and Appellate Benches, as envisaged in the Act. A Corporate Plan for the Commission was prepared with the assistance of ADB consultants, which covers organizational structure, reporting relationships and functional profiles, information systems strategy, plans to upgrade facilities like premises etc., skills development and financial plans.
“To develop a fair, efficient and transparent regulatory framework, based on international legal standards and best practices, for the protection of investors and mitigation of systemic risk aimed at fostering growth of a robust corporate sector and broad based capital market in Pakistan”
“The development of modern and efficient corporate sector and capital market, based on sound regulatory principles, that provide impetus for high economic growth and foster social harmony in the country.”
“To develop an efficient and dynamic regulatory body that fosters principles of good governance in the corporate sector, ensures proper risk management procedures in the capital market, and protects investors through responsive policy measures and effective enforcement practices. “
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