Laws being upgraded

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) is in a race against time to ensure that the promises made to the IMF are fulfilled in time.

Pakistan has assured the IMF that it would upgrade certain laws and introduce new ones related to transparent investment climate in country, but most of the laws are yet to be approved.

The IMF has urged the government to introduce bankruptcy law as due to non-existence of a bankruptcy law in Pakistan to facilitate the financially sinking entities, there has to be Corporate Rehabilitation Act (CRA) in the country.

Currently the draft CRA has been placed at the SECP’s website seeking objections from stakeholders.

The Securities and Exchange Commission of Pakistan Act 1997 needs amendments so that the regulator could act more independently.

Pakistan has assured the IMF that this bill would be submitted to parliament by end of March 2014.

Futures trading bill was forwarded to the parliament in 2010 but it has never been taken up.

Pakistan has told the IMF that this bill would be placed before the parliament before December 2014.

Apart from the laws, other measures mutually agreed with IMF for facilitating and securing investments include the establishment of one stop shop (OSS), a concept similar to the idea of one window operation.

Under the OSS any company getting registered with the SECP would automatically be registered with the Federal Board of revenue (FBR) and the Employees Old Age Benefits Institute (EOBI).

The IMF has been assured that by the end of September 2013 the Board of Investment (BoI), in coordination with SECP, FBR, provincial governments and other concerned agencies, will develop a plan to further simplify procedures and costs for setting up businesses in Pakistan.

However, the provincial bureaucracy is completely resisting the idea of OSS.

“Besides the FBR is also reluctant to share any data with SECP or the Competition Commission of Pakistan (CCP),” said an official of the finance ministry, but expressed confidence that the measures would be taken soon as the finance minister comes back and start pushing things after Eid.

The IMF has also been assured that the SECP will continue with its reforms to develop stock exchanges through attracting strategic foreign investors, introducing Shariah-compliant investment products, and establishing a central counter party to provide protection to investors by reducing credit risk and steps are being taken to develop debt markets in country.