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Establishment
of Securities and Exchange Commission of Pakistan
The Securities
and Exchange Commission of Pakistan (SEC) has
succeeded the Corporate Law Authority (CLA)
which had been administering the corporate laws
in the country since 1981. The Authority was
a government department attached to the Ministry
of Finance and therefore lacked the financial
and administrative autonomy required to build
a regulatory structure conducive to the growth
of the financial sector. Due to its typical
bureaucratic structure, it was difficult for
the CLA to effectively pursue transparency,
disclosure and authenticity, and establish an
upright financial sector. The rapid expansion
of the market during the early 1990's further
highlighted the need for the establishment of
an independent regulatory body with full operational
and administrative autonomy. The process of
restructuring the Authority was initiated in
1997 under the Capital Market Development Plan
of the Asian Development Bank (ADB). A Securities
and Exchange Commission of Pakistan Act was
passed by the parliament and promulgated in
December 1997. In pursuance of this Act, the
Securities and Exchange Commission of Pakistan,
having autonomous status, became operational
from January 1st 1999. The establishment of
the SEC is an important milestone in the evolution
of the regulatory framework for the capital
market in Pakistan. The policy decisions regarding
the constitution and structure of the Commission
were incorporated in the 1997 Act. Powers of
the Commission have been delegated to the individual
Commissioners and Appellate Benches, as envisaged
in the Act. A Corporate Plan for the Commission
was prepared with the assistance of ADB consultants,
which covers organizational structure, reporting
relationships and functional profiles, information
systems strategy, plans to upgrade facilities
like premises etc., skills development and financial
plans.
Mission Statement
"To develop a
fair, efficient and transparent regulatory framework,
based on international legal standards and best
practices, for the protection of investors and
mitigation of systemic risk aimed at fostering
growth of a robust corporate sector and broad
based capital market in Pakistan"
Vision Statement
"The development
of modern and efficient corporate sector and
capital market, based on sound regulatory principles,
that provide impetus for high economic growth
and foster social harmony in the country."
Strategy Statement
"To develop an
efficient and dynamic regulatory body that fosters
principles of good governance in the corporate
sector, ensures proper risk management procedures
in the capital market, and protects investors
through responsive policy measures and effective
enforcement practices. "
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