ISLAMABAD - The Securities and Exchange Commission of Pakistan (SECP) has constituted a “divestment committee” for the purpose of divestment of shares of the Pakistan Stock Exchange Limited (PSX).

The committee comprises of the four newly elected directors of the Exchange - Abid Ali Habib, Muhammad Yasin Lakhani, Abdul Majeed Adam and Ahmed Chinoy, and renowned capital market experts having extensive experience i.e. Arif Habib, Najam Ali, Ferozuddin Cassim, Amin Issa Tai, Muhammad Sohail and Shehzad Chamdia.

The divestment committee has been notified in terms of requirements of the Stock Exchanges (Corporatisation, Demutualization and Integration) Regulations, 2012 and has been entrusted with ensuring completion of the divestment process within six months.

It is expected that post integration, PSX will be able to attract global strategic investors and financial institutions and form technological partnerships, to fulfil the objectives of integration, become a major regional investment hub and play its due role in the development of national economy.

In other development, SECP chairman held a meeting with the incoming and outgoing board of directors of Pakistan Stock Exchange Limited (PSX) at the PSX Building in Karachi. He elaborated that the PSX board in its capacity as “frontline regulator” is primarily responsible for policy formulation and has to also act as a catalyst for policy implementation, monitoring and compliance. The board is expected to be fully committed towards ensuring improved governance practices and the responsibility of the Chairman of the Board at the helm of the affairs is of course magnified. The Chairman, PSX while endorsing the chairman SECP’s remarks expressed the board’s commitment towards good governance, consensus based decision making and that the board should function as a single collective unit.

He emphasized that all directors be it independent or elected should exercise their independent judgment, in the best interest of the market. While concluding his address, the Chairman SECP expressed confidence that with revived efforts, commitments and the new outlook, PSX should be able to market itself and ensure early divestment to quality investors.

He highlighted that PSX faces a number of challenges and opportunities. Integration had placed immense expectations and far greater responsibility on the PSX and in particular its board of directors and management.

Integration is not only a change of name, but an opportunity to create a completely reformed entity which establishes itself as a regional hub and creates a global footprint, he said. The SECP and PSX share a common goal of ensuring better governance; introducing technological advancements; and timely divestment of PSX’s shareholding. He committed that SECP as always would extend its support to the PSX board and also continue with its consultative approach. However, the entire process of divestment has to be completed within six months and the role of the divestment committee is critical to the same. He also stated that it was important that the management and committees of the stock exchange should be independent and insulated from any undue influence and conflicts of interest. While expressing concern on the regulatory performance of the PSX, he indicated room for considerable improvement to remove past inefficiencies and delays in introducing reforms.