Pakistan Stock Exchange (PSX), Mutual Funds Association of Pakistan (MUFAP) and capital market entities and participants are appreciative of the Ministry of Finance, the Director-General (Debt), DPCO, Finance Division, Government of Pakistan and Securities and Exchange Commission of Pakistan (SECP) for carrying out long-overdue capital market reforms.
They issued a joint statement saying:
PSX and MUFAP feel greatly encouraged by the initiatives and reforms undertaken recently for capital market development. We believe that this demonstrates the commitment shown by the federal government, finance ministry, SECP, and its policy board towards the development of capital markets.
The recent initiatives and reforms include, but are not limited to, the discontinuation of institutional investment in National Savings Scheme in line with international best practices, regulatory amendments for the launch of ETFs, revamping of the REIT Regulations, reduction in annual monitoring fees for mutual funds and pension funds, the removal of tax anomalies for the mutual fund industry, book building off the PHL Energy Sukuks through competitive book-building at the PSX platform in line with international best practices and the expansion in allowable expenses on mutual funds.
These changes will go a long way towards the development of vibrant capital markets and greater investor participation in the same.
The statement further said that the government and regulators will accept other proposals presented to streamline and reform the capital markets, including revamping the NBFC regulatory structure in line with international best practices, introducing regulatory framework and instruments for infrastructure funds, continuing reforms in the National Savings Schemes with respect to pricing which will help reduce the interest rate/pricing risk of the government, and better manage its debt maturity profile.
PSX MD Farrukh H Khan felicitating the government on this step said:
We appreciate the ministry of finance, SECP, and debt office for starting the reform of NSS. NSS is ultimately a scheme for the individual and vulnerable members of the society and it is best invested in by these citizens. The reform process initiated will enable the GoP to help such citizens better, while reducing the cost and managing the maturity of such debt with greater certainty. This will also help to develop a proper yield curve and grow the capital markets in Pakistan, which is essential to improve the very low savings and investment rates in the country.
MUFAP chairperson Maheen Rahman appreciating the initiatives taken by the government and regulators stated:
The recent changes in various regulatory requirements will greatly help the mutual fund industry gain a wider footprint across the country. The mutual fund industry stands ready to grow, expand and dedicate our collective efforts and resources towards the establishment of a wider presence of investment through mutual funds which will help contribute towards increasing the savings rate and expansion of capital markets in the country.