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REITs |
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The SECP has prepared draft Real Estate Investment Trusts (REITs) Rules. These draft Rules, along with a Consultative Paper, have been made public for soliciting comments and suggestions from stakeholders and experts. Once received, the comments shall be considered for incorporation in the draft before approaching the Ministry of Finance and Ministry of Law for vetting and notification.
In recognition of international and regional financial market developments and in order to modernize Pakistan's financial sector, the SECP has been working on the potential of introducing REITs in Pakistan as a new investment and saving vehicle. The formulation of the draft REITs regulatory framework is a significant milestone in this regard. The REITs Rules lay down the requirements for establishment of REITs in Pakistan and are based on the study of international jurisdictions by a Task Force constituted by the SECP for the purpose. The Task Force has highlighted certain impediments in the real estate sector that are expected to hinder the growth of REITs in Pakistan. The Task Force also gave its recommendations to the Federal and Provincial Governments on fiscal incentives and removing the various impediments, to ensure an orderly and transparent introduction of REITs in Pakistan's financial market.
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Company Secretaries |
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Company secretaries play an important role in improving the governance of corporate entities. At present, there are no effective regulatory provisions or institutions for regulation and supervision of these service providers. The profession is fast growing though, particularly due to the legal requirements for appointment of company secretaries by listed companies and single member companies (SMCs). In this regard, the SECP has prescribed the qualifications of company secretaries to be appointed by listed companies and SMCs, through the Companies (General Provisions and Forms) Rules, 1985 and the Single Member Companies Rules, 2003, respectively.
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Administrators, Receivers and Liquidators |
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Administrators, receivers and liquidators play an important role in not only corporate insolvency but also in prevention of mismanagement of companies. This role is reflected in various sections of the Companies Ordinance, 1984 including Section 295 whereby the SECP may order appointment of an administrator from a panel maintained by it to manage the affairs of a company that is not being run properly. Similarly, in winding up of companies by the court, an official liquidator is appointed from a panel maintained by the court, on the recommendations of the SECP. Presently, there is no regulatory framework in place for these professional service providers.
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Stock Brokers and Agents |
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The integrity of members of stock exchanges and their brokers and agents is essential to instill confidence of investors in the capital market. In terms of the Securities and Exchange Ordinance, 1969, the SECP has the authority to monitor intermediaries associated with the securities market.
The SECP regulates the affairs of brokers and agents through the Brokers and Agents Registration Rules, 2001. In case of any unscrupulous or unethical activity or contravention of legal provisions, the SECP is empowered to cancel or suspend the registration of brokers and agents and impose fines. The Members' Agents and Traders (Eligibility Standards) Rules, 2001 lay down necessary criteria for registration of agents and traders of members of stock exchanges.
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Financial Analysts |
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Financial and investment analysts play a crucial role in the securities market. However, there is presently no direct legal requirement for regulation or supervision of these service providers.
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Insurance Surveyors and Intermediaries |
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Section 20(4)(t) of the Securities and Exchange Commission of Pakistan Act, 1997 provides for regulation of professional organizations connected with insurance business. Moreover, Section 20(4)(s) thereof provides that the SECP has to ensure and monitor compliance of insurance surveyors and intermediaries with laws, rules and regulations pertaining to insurance.
The insurance law has put in place strict controls for insurance agents and insurance brokers. Licensing, qualification and power for inspection in relation to insurance agents and insurance brokers are stated in Part XIII of the Insurance Ordinance while licensing and registration of insurance surveyors is to be monitored and maintained by the SECP as provided in Sections 112 to 114 of the Insurance Ordinance. |
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Actuaries |
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The SECP may give assent to or reject, on reasonable grounds, the appointment of an actuary by any insurance company under Section 26 of the Insurance Ordinance. The responsibilities of actuaries and their dismissal are provided in Section 27 of the Insurance Ordinance. Moreover, Section 22(4)(da) of the Securities and Exchange Commission of Pakistan Act, 1997 requires the SECP, while exercising its powers, to have regard to the professional competence and capability of persons engaged in the provision of services in the insurance industry.
While the said provisions do provide the SECP with authority in respect of appointment of actuaries, there is no specific provision empowering the SECP to prescribe a code of conduct for actuaries or impose penalties in case of deviation from responsibilities laid down in the Insurance Ordinance.
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Credit Rating Companies |
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In terms of Section 32-B of the Securities and Exchange Ordinance, 1969, the SECP is vested with powers to regulate credit rating companies. The Credit Rating Companies Rules, 1995 provide the necessary legal framework for registration and certain operational matters of credit rating companies. Under the said Rules, the SECP has powers relating to registration, renewal and cancellation of licenses of these companies. Moreover, the SECP can also give them necessary directions; accordingly, it has been made mandatory on credit rating companies operating in the country to submit their annual rating reports to the SECP. |
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