Islamabad, March 30, 2017 (PPI-OT):The SECP Chairman, Zafar Hijazi, launched a new User Registration System under eServices. The new system will reduce the incorporation cost from Rs1,500 per user to Rs100 per user besides reducing the turnaround time from days to minutes for registration of users of eServices.
Mr. Hijazi inaugurated the new user registration system during the Financial Reporting Workshop for economic journalists organized by the SECP on Thursday. The SECP’s senior officials spoke defaulting members of the stock exchange, its legal perspective, the SECP’s surveillance and supervision system for the capital market in the workshop.
The SECP Chairman lauded the efforts of Corporate Compliance Department for introducing the revolutionary steps to ensure ease of doing business through a number of initiatives during the last couple of years. He termed the new user registration system a paradigm shift from the traditional registration system to a new modern incorporation regime.
The new simplified User Registration System under eServices replaced the cumbersome process of obtaining digital signatures from NIFT. The user registration under eServices now can be obtained simply by employing user login, password and PIN code. The user registration under eServices are required for incorporation of new company through online and for signing of the documents to be submitted to the Commission and the registrar concerned. This will also be a one-time registration without any renewal and associated cost as is presently required on an annual basis. This facility will be a great incentive for potential promoters of companies, and is likely to further propel corporate growth.
Mr. Hijazi said that the SECP is implementing the Capital Market Development Plan (2016-18) with vigour and focus that is providing a clear direction to the market. He said that the SECP efforts are aimed at preventing market abuses and manipulative practices, promoting public confidence in the market and establishing a robust compliance regime. Consequently, he said, risk management, transparency, governance of capital market infrastructure institutions and investor protection have been greatly improved.
With regards to recent defaults of a few brokerage houses, the SEP Chairman said the there is a complete surveillance department at the SECP to monitor trading at stock exchange, check insider trading and market manipulation. However, proving and establishing an insider trading is a difficult and time taking task. The SECP has to catch the fraudulent elements while safeguarding the investors’ interests and rights.
Usman Hayat, head of SECP’s Risk Management Department, briefed the participants on SECP’s surveillance system for stock market. He explained various risk management models being enforced by the SECP. He advised individual investors to invest through mutual funds that is more secure and hassle- free. Mr Abid Hussain, head of SECP’s supervision department spoke about supervision mechanism, offsite and onsite inspection of broker houses and compliance requirements of brokerage houses for financial reporting.
SECP’s recent measures for ease of doing business
Designated facilitation desks have been established in Companies Registration offices (CROs) of Karachi, Lahore and Islamabad for facilitation of public. Instructions have been issued to all CROs to provide maximum facilitation to public in respect of incorporation of companies. Incorporation fee for small companies having authorized capital up to Rs100,000 has been substantially reduced and now a small company can be incorporated by just paying filing and incorporation fee of Rs2,000 in case of online filing and Rs4,000 in case of off line filing.
The facility of fee payment through bank transfer and credit cards has also been provided apart from payment through conventional mode. In addition, free certified copies of incorporation documents at the time of incorporation of companies and subsequent filing of statutory returns are being provided to reduce cost of doing business and to facilitate business community. CROs in Karachi, Lahore and Islamabad operate on Saturdays exclusively for providing service to business companies/corporate sector.
A number of measures have been proposed in the draft Companies Bill 2017 already passed by the National Assembly and presently under consideration of the Senate, will further encourage the small businesses to adopt the corporate form of business organization and will contribute towards a healthy growth of the corporate enterprises, a primary objective of the Commission.
Mr. Hijazi said that various reform measures are being introduced through said Bill to facilitate business start-up in the country. These include provisions for a fast-track start-up through allowing simple one- page memorandum of association, and allowing the business entities to undertake all lawful businesses in corporate form, except the prohibited/restricted businesses. Single member companies have been exempted from the requirements to hold annual general meeting as well as to appoint company secretary.
Further, such companies along with private companies having paid-up capital of not more than Rs3 million have been exempted from the requirement to file annual returns if there is no change in particulars in the last annual return filed with the registrar. Private companies with paid-up capital not exceeding Rs10 million have also been proposed to be exempted from the requirement to file financial statements.
Moreover, the Companies (Appointment of Legal Advisers) (Amendment) Act, 2017, has been promulgated and the threshold of the paid-up capital for companies to appoint their legal adviser has been increased from over Rs. 500,000 to over Rs7.5 million. As a result of this reform, around 30,000 companies have been relieved of this regulatory burden.
The SECP experienced a robust corporate growth in the country resulting from the wide range of reform measures during the last couple of years. The SECP registered 854 companies during February 2017, which exhibited a robust growth of 71% over the corresponding month of the last year. Overall, an impressive growth of 34% has been observed in corporate sector during the current financial year over the corresponding period of the last year.
A number of other reform measures are in the offing which are likely to further elevate the corporate trajectory to a higher level, and will also assist the government in meeting its fiscal targets through enhanced documentation of the economy. The salient reform measures which are being taken to further ease doing business environment in the country include revamping of eServices and integration of corporate registry with the provincial authorities, etc. The Limited Liability Partnership Bill, 2017 has been passed by the National Assembly on February 1, 2017 and has now been introduced in the Senate.
The SECP continued its consultation with stakeholders including FPCCI, OICCI, PBC, ICAP, MAP, ICMAP to discuss their concerns and suggestions on the draft law. By and large, there was found to be broad consensus on the draft law. However, OICCI, PBC and ICAP had a few reservations on the proposed establishment of beneficial ownership registry under the company law framework, and they were of the opinion that the same shall be covered under the taxation laws of the country.
During the discussions, SECP highlighted recommendations of various international forums where efforts are being made to establish beneficial ownership registries. ICMAP had reservations on the financial and cost audit rights, which were duly clarified during the consultation session held with them.
For more information, contact:
Head, Internal and External Communication
Securities and Exchange Commission of Pakistan (SECP)
NIC Building, 63 Jinnah Avenue, Islamabad
Tel: +92-51-9214005 or +92-51-9214009 (Ext. 378)