ISLAMABAD - The Senate has passed the Securities and Exchange Commission of Pakistan (Amendment) Bill, 2016, already approved by the National Assembly earlier in May.

The Bill will facilitate superintendence and control over capital and financial services markets, corporate sector and insurance industry bringing the SECP at par with its international counterparts in the capital markets of the world.

The new law is meant to cover shortcomings in the existing law. The Commission had succeeded the Corporate Law Authority (CLA) in 1999 as a unified regulator of the capital markets and for superintendence and control of corporate entities.

However, its mandate is being enhanced through various amendments, such as floatation, management and regulation of modarabas (1999), insurance sector (2000), non-banking financial companies sector (2002), commodity futures market (2003), real estate investment trusts (2008) etc.

The law will meet the local and international requirements for the corporate sector regulator, including the requirements of the International Organisation of Securities Commissions (IOSCO).

The SECP (Amendment) Bill, 2016 provides that the Commission shall be administratively, financially and functionally independent and the federal government shall use its best efforts to promote, enhance and maintain its independence.

Furthermore, the vacancy appearing in the Commission and its Policy Board shall be filled within 120 days; the number of private members in the Policy Board will be increased from four to six; the Commission shall be able to constitute committees, task force, consultative groups etc for assistance in the performance of its functions.

The functions of the Commission have been increased to include regulations and facilitate growth of Shariah compliant financial products; healthy growth of the corporate sector (public and private); to promote good corporate governance; to promote, encourage and enforce proper conduct, competence and integrity of regulated persons; to create awareness among investors and also to provide protection to them; to ensure development of sound regulatory framework to counter illegal and unfair practices in financial services market; to control and minimise market abuse, misconduct and financial crimes in financial services market and other sectors regulated by the Commission.

Additionally, in order to introduce transparency, provisions regarding disclosure of information in public interest along with statutory powers to assess potential and emerging systemic risks in the capital market have also been incorporated in the Bill. To ensure quality of audit of public interest companies and provide for an effective mechanism, the amendment Bill envisages the establishment of an independent Audit Oversight Board. Moreover, person wishing to carry on activities as a self-regulatory organisation (SRO) will be able to apply to the Commission and the same may be granted registration if deemed appropriate by the Commission.

The Bill also contains detailed provisions regarding prosecution of offences by the Commission, while powers pertaining to inspection, investigation, enforcement and call for information have been enhanced.

Besides, effective mechanism has also been introduced in the amendment Bill for the recovery of penalties through court in addition to recovery as arrears of land revenue.

For the purpose of investigation, the Commission shall also be able to seek assistance of any other investigation agency, bureau, local police, statutory body, banks, etc which shall provide the same to the Commission. The amendment Bill also provides that any person aggrieved from the order of the Appellate Bench will be able to file review within 30 days of the date of such order.

The new law will also enable the Commission to seek international cooperation and extend assistance to a foreign regulatory authority in investigations and inquiries since the current law contains no statutory provision to that extent.

In order to ensure and elucidate Commission as a unified regulator, a schedule has been added which provides the list of administered laws.

The Bill will become an Act after receiving the President's assent.