SECURITIES & EXCHANGE

COMMISSION of PAKISTAN
(SECP)
By:
Mujtaba Haider (12713)

Introduction
TheSecurities and Exchange Commission of
Pakistan(SECP) is thefinancial regulatory agencyin
Pakistan whose objective is to develop a modern and
efficientcorporatesector and acapital marketbased on
sound regulatory principles, in order to encourage
investment and foster economicand prosperity in Pakistan
Itis thefinancial regulatory agencyin Pakistan whose
objective is to develop a
a) modern and efficientcorporatesector
b) capital marketbased on sound regulatory principles

 The SECP's head office is located in the NIC

Building onJinnah Avenuein theBlue
AreaofIslamabad, Pakistan's capital.
It also has regional offices called Company
Registration Offices (CROs) in
Karachi,Lahore,Multan,Peshawar,Sukkur,
FaisalabadandQuetta

History
The Securities and Exchange Commission of Pakistan (SECP) is the
successor of the former Corporate Law Authority (CLA), which was an
attached department of theMinistry of Finance.
The process of restructuring the CLA was initiated in 1997 under the Capital
Market Development Plan of theAsian Development Bank(ADB).
A Securities and Exchange Commission of Pakistan Act was passed by the
Parliament and promulgated in December 1997.
It became operational on January 1 1999.
The Act gave the organization the administrative authority and financial
independence to carry out the reform program of Pakistans capital market.

Functions
The primaryfederalregulatory agencyfor thesecuritiesindustry,
whose responsibility is:
To promotefull disclosure.
Toprotectinvestorsagainstfraudulentand manipulative
practices in thesecurities markets.
The securities and Exchange Commission is an independent,
quasi-judiciaryagency(A term referring to decisions made by
administrative tribunals or government officials to which the rules
of natural justice apply.).
SEC is responsible for charting out and implementation of laws, rules
and regulations concerning operations of stock and bond market.
Also rules for trading and participation by brokerages, trading
companies and their client corporations whose bond stocks are listed
and traded at stock exchanges.

Organizational Structure
The SECP is a collegiate body with collective responsibility.
Operational and executive authority of the SECP is vested
in the Chairman who is the SECP's Chief Executive Officer
(CEO).
He is assisted by four (4) Commissioners, particularly to
oversee the working of various operational units as may
be determined by him.

Departments Under SECP

The securities and Exchange Commission is comprised of four basic
divisions.
Division of Corporate Finance:
is inchargeofmakingsure allpublicly traded companiesdisclosethe
requiredfinancialinformation to investors.
TheDivision of Market Regulation:
oversees all legislation involvingbrokersandbrokerage firms.
TheDivision of Investment Management:
regulatesthemutual fundandinvestment advisorindustries.
TheDivision of Enforcement:
enforces the securities legislation and investigates possibleviolations.

Divisions in SECP
Company Law Division
Its primary functions include registration of companies, regulating
their statutory functions, and monitoring of corporate compliance.
Responsible for regulation and enforcement of companies listed
on stock exchanges, public un-listed and private companies with
relevant laws and applicable accounting standards through review
of accounts, investigation, and prosecution.

Securities Market Division

It regulates the primary and secondary markets as well as market
intermediaries through registration, surveillance, investigation,
enforcement, and rule making, with the objective of protecting
investors interest.

 Specialized Companies Division

Licensing, registration, regulation, on-site inspection, off-site
surveillance and enforcement regarding Non Bank Finance
Companies (NBFCs), Mutual Funds, Pension Funds, Real Estate
Investment Trusts, Private Equity Funds, Modaraba Management
Companies & Modarabas.

Insurance Division
The SECP, being the apex regulator of the insurance industry, has a
strategic priority and commitment to strengthen and maintain an effective
regulatory environment in which insurance and takaful business can flourish
and prosper.

SECP in action

Difficulties faced by SECP

SECP is funded by government and does not have its own
resources
Corporate governance and keeping an eye on money market
at the same time is a difficult

A lot of inspection needs to be done to avoid insider trading

Pakistan does not have a tradition for modern corporate
culture

 Never been able to build investor confidence

largely due to the stock market crash of
2008

Satisfying all the stakeholders at the same

time is not possible due to conflict of interest

Security & Exchange Board of

India
It was officially established by TheGovernment of Indiain
the year 1988 and given statutory powers in 1992 with SEBI
Act 1992 being passed by theIndian Parliament.
SEBI has three functions rolled into one body:quasilegislative,quasi-judicialand quasi-executive.
SEBI has its Headquarters are at the business district
ofBandra Kurla ComplexinMumbai, and has Northern,
Eastern, Southern and Western Regional Offices inNew
Delhi,Kolkata,ChennaiandAhmedabadrespectively.

 The SEBI is managed by its members, which

consists of following:
a) The chairman who is nominated by Union
Government of India.
b) Two members, i.e. Officers from Union Finance
Ministry.
c) One member from The Reserve Bank of India.
d) The remaining 5 members are nominated by
Union Government of India, out of them at least 3
shall be whole-time members.

U.S. Securities and Exchange

Commission
The regulatoryagencywas created during theGreat
Depressionthat followed theCrash of 1929. The main
reason for the creation of the SEC was to regulate
thestock marketof 1940.
The SEC consists of five Commissioners appointed by
thePresident of the United States, with the advice and
consent of theUS Senate.
Their terms last five years, and are staggered so that
one Commissioner's term ends on June 5 of each year.
T

 To ensure that the SEC remainsnon-partisan,

no more than three Commissioners may
belong to the same political party.
The President also designates one of the
Commissioners as Chairman, the SEC's top
executive. However, the President does not
possess the power to fire the appointed
Commissioners, a provision that was made
to ensure the independence of the SEC.

The SEC's divisions are:

Corporation Finance
Trading and Markets
Investment Management
Enforcement
Risk, Strategy, and Financial Innovation

THE END