ISLAMABAD, Sept 26: The Securities and Exchange Commission of Pakistan (SECP) is working on a Capital Market Development Plan in coordination with stakeholders.

The proposed plan would focus on five areas: investor education and expanding outreach of the capital market to masses; encouraging new listings; introduction of new products; improving coordination with various regulators and government bodies; and revamping legal framework.

The SECP has discussed the plan with the stock and commodity exchanges, the Central Depository Company (CDC) and the National Clearing Company (NCCPL) for developing the strategic plans for the capital market.

For revamping of legal and regulatory framework, it suggested corporatisation / demutualization of stock exchanges and separation of their regulatory and business development functions.

Considering the importance of investor education and capital market outreach, it the SECP in coordination with stock exchanges would organise road-shows.

The branch network for brokers, mutual funds and the commodity exchange would also be expanded, within the country.

Moreover, measures would be taken to facilitate new listings for attracting corporates with large capital base to list through various debt and equity instruments.

The processes of book building and initial public offering would be streamlined to make them more efficient and less cumbersome.

The stock exchanges would explore the possibility of setting up separate boards for facilitating small and medium sized companies and venture capital/green field projects for easier fund-raising.

The SECP and the managements of stock exchanges would take measures for improving the overall quality of listings at the stock exchanges, to safeguard investors from investing in shell/defaulting companies.

The plan has stressed for introduction of new products and systems; reviewing/revamping existing products and market segments, including development of Islamic products.

Greater efforts would also be undertaken for introduction of Islamic products. Additionally, measures would be taken for development of debt capital markets, commodity and currency markets, mutual fund industry and real estate investment trusts.

As greater automation in the capital market operations has been introduced through e-dividend and e-voting facilities, the plan said that the e-dividend mechanism will enable automatic dividend distribution to the entitled shareholders through the CDC, while e-voting, being an internet based platform will enable the shareholders to vote on resolutions proposed by companies without the necessity for them to be physically present at the meeting or sending their votes through post.

Structure of capital market intermediaries would also be improved with the introduction of a revised brokers' regime based on the IOSCO Principles, which envisages strengthening their capital base and segregation of clearing and trading members. It has been agreed that the NCCPL needs to be better capitalised to enable it to fully function as a central counterparty in line with international best practices.

To facilitate investors, the current limits for the Investor Protection Funds would be enhanced and initiatives would be taken to put in place mechanisms for expeditious resolution of investor complaints. Further, efforts will be made for establishment of Pakistan Collateral Management Company to facilitate electronic warehousing of receipts for the commodity exchange.

Regarding improvement in coordination with various regulators and governmental bodies, the SECP said that efforts would be focused on improving coordination and liaison with the relevant ministries, non-governmental and foreign institutions and counterparts and to improve Pakistan's image/ranking in the global index providers like the MSCI, FTSE, etc.