Lslamabad - The Securities and Exchange Commission of Pakistan (SECP) has registered 469 companies in December 2014.

The new incorporation includes two foreign companies and 41 local companies with foreign investment.  The SECP witnessed 12 percent increase in company’s registration during the first half of current fiscal year. Duly July-December 2014, 2,192 new incorporations were made as against 1,950 companies registered during the same period last year. The growth in corporate registration indicates a very healthy trend and a significant shift towards documentation of the economy. It is also a sign of favourable economic policies of the government for corporates. Services, information technology, construction, communication and power generation sectors have shown decent growth, reflecting the measures taken by the government for the development of these sectors.

During this period, around 90 percent companies were registered as private limited companies, 6 percent companies were registered as single member companies and three percent of the companies were registered as public unlisted, associations’ not-for-profit, trade organisations and foreign companies.  The services sector took the lead in new incorporations with registration of 281 companies, followed by trading with 250, tourism with 197, information technology with 192, construction with 148, corporate agricultural farming with 79, food and beverages with 64, communication and education with 61 each and oil and gas with 58 companies. During this period, 17 foreign companies were also registered at the Company Registration Offices (CROs) in Karachi, Islamabad and Lahore.

Foreign investment was also witnessed in 248 new companies from diverse sectors. These companies have foreign investors from Australia, Afghanistan, Belgium, Bulgaria, Canada, China, Denmark, France, Germany, Italy, Jamaica, Japan, Jordan, Lebanon, Libya, Mauritius, Netherlands, New Zealand, Norway, Oman, Panama, Saudi Arabia, Singapore, South Africa, Sri Lanka, Sweden, Switzerland, Tanzania, Turkey, UAE, UK and the US.  

The highest numbers of companies, i.e. 741, were registered at the Lahore CRO, followed by 585 and 547 companies registered at CROs in Islamabad and Karachi respectively. The CROs in Multan, Peshawar, Faisalabad, Quetta and Sukkur registered 108, 97, 79, 23 and 12 companies respectively. During the first half of the current fiscal year, the SECP has accepted the requests from 337 companies for an overall increase of Rs202 billion in their authorised capital. In addition, 464 companies filed returns for increase in the paid-up capital with the total increment amounting Rs55 billion.

Meanwhile, in other development, In order to ensure an efficient securities market the Securities Market Division of the SECP took enforcement actions against several market participants for non-compliance with regulatory framework during the last quarter (October-December).

Pursuant to the on-site inspections of the brokerage houses of the Karachi Stock Exchange Limited (KSE), enforcement actions were initiated against a number of brokers. Penalties were imposed on Global Securities Pakistan Limited, Invest and Finance Securities Limited, Seven Star Securities (Private) Limited and Alfa Adhi Securities (Private) Limited on account of failure to maintain proper segregation of clients’ assets; improper books of accounts; failure to have proper Know Your Customer and Customer Due Diligence Policy in place and imposing late payment charges to their clients.

An order against WE Financial Services Limited was issued with the warning to strictly maintain segregation of clients’ assets. Warnings were also issued to MH Securities (Private) Limited and Cedar Capital (Private) limited for non-compliances identified as a result of inspection. Additionally the brokers were required to provide additional information on cutoff dates to substantiate their claims of maintaining segregation of clients’ assets.  

An order was also issued for the recovery of tenderable gain to the director of listed company and 13 orders penalizing director/beneficial owner of 4 listed companies under section 224(4) of the 1984 Companies Ordinance for late filing of returns of beneficial ownership were issued. Moreover, 10 warning letters were issued to the directors/beneficial owners of 10 listed companies for late filing of returns of beneficial ownership and 5 warnings were issued to the listed companies for late filing of annual returns.