Role of SECP in Corporate Governance
Introduction
Corporate
Governance
“Formal system of accountability and control for a
legal, ethical and socially responsible decisions and use of resources in
business organization”
Top to
Down Process
Corporate
Governance Functions Þ Millstein et al.
Consistent
Improvement of existing laws
Issue of
Code of Corporate Governance
In March 2002
United Nation Development Programs & Economic
Affair Division
Under the
Section of 34(4), SECP issued directions
to KSE, ISE & LSE
Code Vs
Corporate Law
Corporate
Laws Review Commission (CLRC)
Significance
of Corporate Governance arises with the increasing number of Corporate Scandals
Contents
Historical Prospective
Tool of
corporate management
Strengthens
social, cultural and religious values of a country
Corporate
environment
Corporate
governance issues
Corporate
law in Pakistan
Historical Prospective
Contents
History Of Corporate Governance In Pakistan
sole
proprietorship
conflict
of interest
Corporate
entities regulated by SEC
Corporate
Law Authority
Corporate
Governance framework
Islamic
Ethics
Initiatives taken by SECP
Issuance
of Code
Further
explanations & interpretations
Formation
of PICG
Notification
on CSR
Corporate
Governance in Banks
History Of Corporate Governance In Pakistan
Contents
Creation
of SECP
set up in
pursuance of the SECP Act, 1997
SECP
became operational in January 1999
initially
concerned with the regulation of corporate sector and capital market
Vision
Mission
Strategy
Creation of Securities and Exchange Commission of Pakistan
Contents
Major Institutions
SECP
SBP
PICG
ICAP
KSE, LSE,
ISE
IFC’s
Corporate Governance Project in Pakistan
LUMS
IBA,
Karachi
ACCA,
Pakistan
Institutions Contributing for implementing Corporate Governance in
Pakistan
Contents
Constitution of Corporate Law Authority
Notified by: Federal Government
Number of Members: Not more than 3
Federal Government appoints Chairman
Powers and functions of the Authority
Specify limitations & conditions
Purpose of Proceeding/enquiry
Produce, specify & examine books, accounts etc.
CLA vs. SECP
Role, Function and Legal Framework of Corporate Law Authority Of
Pakistan
Contents
SECP
regulates the corporate sector
Under SEC Act, 1997
Companies
Ordinance, 1984
Objectives of the CLRC
To access
the companies ordinance objectives
To
develop and maintain the efficient, deregulated and cost effective corporate
sector
To
prepare and revise the conceptual framework
Redraft
the companies ordinance law
Review
the structure and contents
To
balance the international practices and indigenous conditions
Execution of the work
A
conceptual paper
A draft
bill
A
statement of the objects and reasons of amendments
A report
Companies Ordinance 1984 and Its Implementation
Contents
SECP
issued Code of Corporate Governance
Best performance & ensure company’s conformance in
the long run
Benefits
of SECP that relates to corporate governance in Pakistan
- Competitive market -
Corporate sector growth
- Corporate sector growth - Attract capital & investors
- Enhance the productivity & expansion of
the business
Company
Law division, specialized company division including Modaraba creation
Basis of Islamic economic principles
Role, Function and Legal Framework of SECP
Contents
SECP Divisional Structure
SECP functional profile
Advisory wing
To provide legal advice to the operational divisions
and other departments of SECP
Litigation
To Manage the operational divisions and other
departments of SECP
Legislation
Amendment and vetting from the Federal Government and
for the SECP
Role, Function and Legal Framework of SECP (cont.)
Conclusion
SECP successfully implemented the effective code of corporate
governance
It ensured the conformance to the applicable laws, rules and
practices
Better outcome and streamline operations within the corporate
enterprise
Recommendations
Effective
and better implementation of the identified methods and principles of corporate
governance
Consistent
examination of the companies ordinance
Redrafting
the law
Only
professional accountants should be the Chief Finance Officer
The
auditors must be appointed by the SECP
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