Securities and Exchange Commission of Pakistan

Division Department Wing BBA- Finance

Profile
The securities and exchange commission of Pakistan was set-up in pursuance of the Securities and Exchange Commission of Pakistan Act 1997. SECP became operational in January 1999 and has come a long way since then. It was initially concerned with the regulation of corporate sector and capital market. Overtime its mandate has expanded to include supervision and regulation of insurance companies, non-banking finance companies and private pensions.

Company Law Division

The company law division is divided into following two departments: (1) Corporatization & Compliance: Its primary functions include registration of companies, regulating their statutory functions, and monitoring of corporate compliance through examination of statutory returns and accounts.

Company Law Division

(2) Enforcement Department: The enforcement department is responsible for regulation and enforcement of companies listed on stock exchanges, public un-listed, private companies and companies formed under section 42 of The Companies Ordinance 1984 (Except insurance companies, nonbanking finance companies and modarbas) with relevant laws and applicable accounting standards through review of accounts.

Securities Market Division

The securities market division is responsible for monitoring, regulating and developing securities market. SMD also processes and grants approvals to prospectuses of public offering of both debt and equity securities. This division consists of following departments: (i) Market Supervision and Capital Issue Dept (ii) Policy, Regulation and Market Development Department

(i) Market Supervision and Capital Issues Department

Market Surveillance, Litigation and Advisory Wing: This wing is responsible for monitoring and vigilant surveillance of the trading activities at the three stock exchanges to ensure that market participants are not exposed to manipulation or any unfair play. It also detects cases of market manipulation, insider trading and conducts detailed investigations and inquiries in such cases.

(i) Market Supervision and Capital Issues Department

Beneficial Ownership Wing: This wing is responsible to monitor the trading activities of management & beneficial owners having more than 10% shareholding of a listed equity security. Every Director, Chief Executive, Chief Accountant, Company Secretary and beneficial owner is required to file a return. Such beneficial owners are discouraged to make windfall gain.

(i) Market Supervision and Capital Issues Department

Compliance and Inspection Wing: The wing ensures the compliance of relevant rules and regulations by the Stock Exchanges and enforcement through off-site inspection. The off-site inspection comprises of reporting, as per prescribed format and frequency to the commission by regulated entities.

(i) Market Supervision and Capital Issues Department

Brokers Registration and Investor Complaints Wing: This wing is entrusted with registration of brokers and handling investor complaints. The registration of brokers establishes a direct regulatory nexus for ensuring investor protection and observance of code of conduct. This wing also plays an instrumental role in ensuring effective redressal of investor complaints and grievances, particularly those of small investors.

(i) Market Supervision and Capital Issues Department

Capital Issue Wing: This wing deals with the cases regarding approval of prospectuses for public issue/offer of securities. The prospectus of any company inviting public subscription for its securities is required to be approved by SECP under companies ordinance 1984 prior to issue.

(ii) Policy, Regulation and Market Development Department

This department is responsible for development and review of policies and regulations governing key capital market institutions, including stock and commodity exchanges and central depository company (CDC). PRMD is also responsible for coordinating with the relevant ministries, government and non-governmental organizations. PRMD consists of three wings.

(ii) Policy, Regulation and Market Development Department

Stock Exchanges, Depository and Clearing Wing: SEDC is mandated with formulating the regulatory framework of the Stock Exchanges and includes devising regulatory framework for capital markets for improved risk management in their operations and procedures, introduction of new products and systems, good governance, increased transparency and improved investor protection.

(ii) Policy, Regulation and Market Development Department

Commodities and Currencies Wing: This wing is responsible for formulating the regulatory framework and for continuously reviewing/revamping the existing regulatory framework of Pakistan Mercantile Exchange to improve risk management, introduction of new products and systems. CC is also involved in diversifying existing product portfolio of PMEX.

(ii) Policy, Regulation and Market Development Department

Debt Capital Market Wing: DCM is responsible for devising SECP reform agenda for the organized development of an active and transparent secondary debt capital market in Pakistan. The wing is involved in developing and reviewing policies and regulations for the debt market including new product development and system enhancement based on international standard and best practices.

Specialized Companies Division

The specialized companies division strives to provide regulatory environment which is conducive for development and promotion of Non Bank Financial Sector. Major functions include licensing, registration, regulation, on-site inspection, off-site surveillance and enforcement. This division has following two departments: (a) Policy, Regulation and Development Department (b) Supervision Department

(a)Policy, Regulation and Development Department

PRDD comprises of following wings: Asset Management Companies Wing NBFCs Litigation and Advisory Wing REIT, Pension and Private Equity Wing Modarba Wing

(b) Supervision Department

SD is comprised of following wings: On-site Inspection Wing: This wing is responsible for centralized on-site inspection of the entities licenses and regulated by SCD. Inspection Wing conducts full scope inspections of the entities on regular basis according to the inspection plan chalked out for the entities regulated by the Division.

(b) Supervision Department

Off-Site Surveillance Wing: This wing is responsible for off-site surveillance of the entities licensed and regulated by SCD. This wing has prescribed monthly on-line returns for regular submission by NBFCs/Modarbas to SECP. Off-site surveillance is also conducted on the basis of annual, half yearly and quarterly accounts.

(b) Supervision Department

Enforcement Wing: This wing is responsible for centralized enforcement function of NBFCs and has become part of supervision department after recent reorganisation of specialized companies division.