ISLAMABAD, July 5, 2023 – In a bid to promote the capital market and enhance financial inclusion, the Securities and Exchange Commission of Pakistan (SECP) has recommended allowing individuals to act as securities and futures advisors. This proposal aims to broaden the investor base and expand the outreach of the capital market.
On Tuesday, the SECP proposed amendments to the Securities and Futures Advisors (Licensing & Operations) Regulations, 2017. These amendments are part of the Commission’s broader initiative to make the capital market more accessible and inclusive.
The key proposal allows individuals to become securities and futures advisors, significantly expanding the pool of professionals who can offer advisory services. Additionally, individuals will be permitted to act as distributors of units of mutual funds across multiple Asset Management Companies (AMCs). This change is expected to create new distribution channels, making financial products more accessible to a wider audience.
“This initiative will enable the creation of new distribution channels and increase financial inclusion in the country,” an SECP official stated. By allowing individuals to operate in these capacities, the SECP aims to reach untapped segments of the population, thereby driving greater participation in the capital market.
Furthermore, the SECP has proposed reducing the regulatory burden on companies. One notable change is the reduction in the required experience for CEOs or heads of advisory services from five years to three years. This adjustment is designed to encourage the participation of young, qualified professionals who meet the fit and proper criteria to act as securities and futures advisors.
“The reduction in the experience requirement will encourage participation of young and qualified professionals in the capital market,” the SECP official added. This move is expected to attract fresh talent to the industry, fostering innovation and modernizing advisory services.
The proposed amendments reflect the SECP’s commitment to creating a more dynamic and inclusive capital market environment. By lowering entry barriers and expanding the roles individuals can play, the SECP aims to stimulate growth and enhance the overall efficiency of the market.
These changes come at a time when the capital market is seeking ways to adapt to global standards and best practices. The SECP’s initiative aligns with international trends where regulatory bodies are increasingly focusing on financial inclusion and the democratization of financial services.
The SECP has invited public feedback on the proposed amendments, ensuring that stakeholders have a say in the regulatory evolution. This collaborative approach aims to fine-tune the regulations in a way that best serves the market’s needs while maintaining robust oversight and investor protection.
In conclusion, the SECP’s proposed amendments to the Securities and Futures Advisors Regulations represent a significant step towards a more inclusive and dynamic capital market in Pakistan. By empowering individuals and reducing regulatory burdens, the SECP is paving the way for greater participation, financial inclusion, and market growth.
