SECP concludes 579 cases, imposes Rs4,778m in fines

ISLAMABAD: Securities and Exchange Commission of Pakistan concluded 579 cases through orders imposing penalties amounting to Rs4,778 million on listed as well as unlisted companies for violations in fiscal year 2021-22, the SECP annual report showed.

The SECP on Friday released its annual report for the fiscal year 2021-22. The report caused under section 25 of the SECP Act 1997 comprises details of commission activities and financial statements for fiscal year 2021-22.

SECP Chairman Aamir Khan expressed his satisfaction that the commission has achieved significant progress in multiple areas including transparent and fair enforcement, promoting ease of doing business, supporting innovation and entrepreneurship, financial inclusion and market development.

Khan, in his message published in the report, said that in pursuit of developmental reforms “the over-arching enablers were identified as promoting digitalisation, simplifying regulatory structure, reducing cost of compliance and invigorating the exchange of ideas and concepts with market participants and stakeholders”.

In FY 2021-22, building on the initiatives of the previous fiscal year of establishment of a dedicated supervision division and a dedicated adjudication division, the SECP concluded 579 cases and imposed penalties to the tune of Rs77 million on listed companies and licenced entities on account of violation of relevant laws. Likewise, 85,519 orders were issued to unlisted companies imposing penalties amounting to Rs4,701 million.

This year, while moving further towards a functional based structure, the SECP has successfully consolidated its licensing activity under a centralised department.

The centralisation of licensing would bring uniformity, efficiency and transparency into the issuance and renewal of licenses, and related approvals.

Other significant progress includes the issuance of digital mortgage certificates and acknowledgements of annual and other returns; issuance of digital CTCs of the company's statutory returns and digital company profile.

To facilitate easy exit, an online portal of Companies’ Easy Exit has been launched. Moreover, the process of company incorporation has been centralised at the head office to standardise and facilitate expeditions processing. The SECP, in coordination with the State Bank of Pakistan (SBP), has also launched an exclusive digital portal, which enables banks to certify a company’s filings.

In FY 2021-22, numerous reforms were introduced in the capital market to bring efficiency, transparency, depth and ease for the investors. The process for submitting IPO applications by the issuers/companies has been automated. The opening of new accounts by small investors was made very simple through a new category of “Sehl Account”, wherein investors can be onboarded through microfinance banks backed by telecom providers.

Further, to simplify investment in mutual funds, Pakistan’s first mutual fund digital distribution platform, namely “Emlaak Financials” has been launched by the central Depository Company (CDC).

The pension funds have been allowed to invest in REITs, private equities, venture capital funds and ETFs. Moreover, pension funds have also been allowed passive investment strategies in the form of index sub-fund.

In addition, financial institutions including banks, DFIs, PDs, AMCs etc have been allowed to act as market makers, thereby increasing secondary debt market liquidity. So far, 16 financial institutions have been registered as market makers.

For the first time, the SECP has awarded a NBFC license to operate as a P2P lending platform on a commercial basis. The P2P operations of NBFC were successfully tested under SECP’s regulatory sandbox.

To provide immediate responses and guidance regarding company incorporation, the SECP has launched WhatsApp and Wechat service. Through the service which is the first of its kind in Pakistan’s public sector, the SECP has handled 29,681 queries during FY 2021-22, having a satisfaction ratio exceeding 89 percent.

The SECP also handled 10,204 complaints through its digital complaint dashboard (Service Desk Management System – SDMS), out of which, 9,761 (96 percent) stand resolved/closed and the remaining are at different stages of being addressed.

SECP chairman said, "SECP will continue promoting innovation through closer collaboration with our regulated sectors, academia and incubators.”