Latest news with #SecuritiesandExchangeCommissionofPakistan
Business Recorder
4 days ago
- Business
- Business Recorder
Govt well prepared to tackle any fallout: Aurangzeb
ISLAMABAD: Finance Minister Muhammad Aurangzeb said Tuesday that the government will ensure adequate stockpiles of petroleum products in the country keeping in view geopolitical tensions and regional developments in Middle East. Senator Muhammad Aurangzeb participated as the Chief Guest at the 'National Workshop on Transitioning to Defined Contribution Pension Schemes', organised by the Securities and Exchange Commission of Pakistan (SECP) at a local hotel on Tuesday. Finance Minister assured that Pakistan was well-prepared to navigate any potential fallout from regional instability. In his keynote address, the Minister began by briefing the participants on the recent geopolitical tensions and regional developments, sharing insights from a high-level meeting he chaired yesterday to review the evolving situation and its potential economic implications for Pakistan. He noted that in-depth discussions were held with key stakeholders on scenario planning, ensuring adequate stockpiles of petroleum products, and monitoring asset class pricing. He emphasised the government's firm resolve and preparedness to handle any eventuality, stating, 'We are in a good place — but hope is not a strategy. We have to plan for every possible outcome.' Touching upon international economic developments, Senator Aurangzeb shared details of his constructive and positive conversation with the US Commerce Secretary held late last night. He described the ongoing discussions on US tariffs as encouraging and noted that both countries are making steady progress and the broader objective is to deepen bilateral relations into a strategic economic partnership. Highlighting the government's reform agenda as laid out in the recently announced federal budget, the Minister reaffirmed the government's commitment to macroeconomic reforms. He emphasised that the government would continue to push forward on key areas such as privatization, tax reform, state-owned enterprise (SOE) restructuring, federal government rightsizing, pension, and public finance reform. Speaking on the subject of pension reforms, Senator Aurangzeb explained the rationale behind the government's decision to transition new civil servants to a Defined Contribution (DC) pension scheme, effective July 1, 2024. He underscored that this shift was a critical step taken even before addressing the legacy issue of unfunded pension liabilities. 'We had to stop the bleeding,' he said, referencing the fiscal burden of pension payments which have now exceeded one trillion rupees— surpassing the federal government's entire development budget. 'This raises a fundamental question of macroeconomic sustainability,' he added, stressing the urgency of reform. The Minister also commended provincial governments for their proactive role, particularly in the area of public-private partnerships and for taking the lead on defined contribution initiatives. He noted that the theme of the workshop—transitioning to defined contribution schemes—was both timely and significant, likening it to ongoing tariff reforms in its structural importance. Concluding his remarks, Senator Aurangzeb expressed confidence in the collective ability of stakeholders to bring about meaningful change in Pakistan's pension landscape, driven by sustainability, transparency, and long-term fiscal responsibility. Finance Minister underscored the urgent need for pension reform, noting the unsustainability of the current defined benefit system. In his address, Akif Saeed, Chairman SECP, outlined the progress made in developing a robust regulatory framework for DC pension schemes. He emphasised the critical role of technology, transparency, and awareness-building in shaping a modern and inclusive pension landscape. Federal and provincial government representatives shared updates on reform progress, with Khyber Pakhtunkhwa presenting valuable insights from its early implementation experience. The workshop served as a platform for dialogue among senior officials, regulators, financial sector leaders, and development partners. The SECP reaffirmed its commitment to working closely with all stakeholders to develop a transparent, reliable, and future-ready pension system that supports long-term financial security and inclusion. Copyright Business Recorder, 2025
Express Tribune
4 days ago
- Business
- Express Tribune
Aurangzeb pledges tax, energy and SOE reforms
Listen to article Minister for Finance Muhammad Aurangzeb on Tuesday reaffirmed the government's resolve to implement structural reforms to achieve long-term economic growth and stability. Speaking at the "National Workshop on Transitioning to Defined Contribution Pension Schemes", organised by the Securities and Exchange Commission of Pakistan, the minister said that the government was committed to reforming the areas of taxation, energy and state-owned enterprises (SOEs). He emphasised that a major reform initiative introduced in the current year pertained to the tariff structure, aimed at transforming Pakistan into a more competitive economy. This includes gradually dismantling the wall of protection that has long hindered industrial growth. The minister noted that such steps would help domestic industries advance and enable the export sector to become more robust and globally competitive. The government has also taken several measures to address public finance issues, particularly to reduce debt servicing costs, not just through the decline in policy rate, but also through broader fiscal measures. Muhammad Aurangzeb underscored the importance of pension reform as a key component of the broader fiscal strategy and recalled that the government had taken a significant step in that direction last year. "As of July 1, 2024, we announced that all new entrants to the federal government and civil service will move to a defined contribution scheme," he said, adding that it was a necessary move before even beginning to address the legacy issue of unfunded liabilities. The minister stressed the need to stop fiscal bleeding as in this year's budget the pension bill alone crossed Rs1 trillion. He called pension reform not only a matter of fiscal responsibility but it was also essential to ensure long-term macroeconomic sustainability, predictability in government finances and to manage costs effectively. He highlighted that the shift from defined benefit to a defined contribution pension model had significant implications at the individual level. "This transition isn't just a fiscal adjustment; it's about empowering employees to take ownership of their retirement savings." The finance minister pointed out that the government in the FY26 budget proposed a 7% increase in pensions, which was aligned with prevailing inflation trends to protect their purchasing power. The government has also recommended a progressive taxation measure. "We have proposed a 5% tax on the annual pension income exceeding Rs10 million, which has been submitted to parliament for approval." The minister said that those steps reflected a balanced approach, providing relief to pensioners while also ensuring that high-income recipients contribute fairly to national resources.
Business Recorder
14-06-2025
- Business
- Business Recorder
VPS Rules, 2005: SECP invites comments on proposed amendments
ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has issued a Consultation Paper proposing amendments to the Voluntary Pension System (VPS) Rules, 2005, aimed at enhancing access and efficiency in Pakistan's pension framework. The key proposal is to allow Employer Pension Funds (EPFs) to serve multiple employers under a common fund structure. This change would enable pension fund managers to pool contributions from various employers, improving cost-efficiency through economies of scale and allowing Small and Medium-sized Enterprises (SMEs) to offer retirement benefits without setting up separate funds. Beyond previous amendments in VPS Rules, 2005 in February 2024, certain structural limitations continued to restrict the scalability and broader market adoption. The structure restricted each fund to a specific employer, limiting scalability and creating cost inefficiencies, particularly for smaller employers. Subsequently, the SECP initiated an impact analysis to assess the efficacy of the VPS Rules in addressing the evolving dynamics of retirement savings. Various areas of improvement have been resultantly identified to provide operational efficiency, broader pension coverage and to reduce entry barriers for employer participation. The proposed draft amendments aim to align the regulatory framework more closely with international best practices, eliminate interpretational ambiguities, and foster a stronger culture of retirement savings in Pakistan. The consultation paper is open for public comments for 15 days from the date of publication. Copyright Business Recorder, 2025
Business Recorder
07-06-2025
- Business
- Business Recorder
Insurance industry's shift to Takaful: SECP maps out strategic transition plan
ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has chalked out a comprehensive, industry-wide Strategic Transition Plan to facilitate the insurance industry's transition to Takaful with a Riba-free economy. According to the SECP's new working paper, in line with the 26th Constitutional Amendment and the Federal Shariah Court's directive for a Riba-free economy by 2027, it is crucial that both SECP and individual insurance companies take proactive steps towards the transition to Takaful. SECP, in consultation with Shariah scholars and industry stakeholders, needs to formulate a comprehensive, industry-wide Strategic Transition Plan to facilitate the insurance industry's transition to Takaful. This plan may outline SECP's approach to supporting the transition process, including stakeholder engagement, provision of regulatory support, and identification of key areas for facilitating the industry-wide conversion to Takaful. SECP study outlines strategic roadmap reshaping Takaful sector The SECP will specify necessary actions that insurers need to take to align their operations with Shariah principles. This plan may address the conversion of insurance products, investment structures, and operational processes, for ensuring alignment with Shariah principles. The plan may have defined timelines, milestones, and action items to ensure a smooth and consistent transition across the industry within time. Additionally, to ensure effective implementation, SECP may consider establishing a Takaful Committee comprising of SECP representation, Shariah scholars, industry experts, and other relevant stakeholders. This task force may help in developing the Transition Plan, providing oversight, and ensuring compliance with Shariah governance standards throughout the transition process. At company level, the insurers need to develop comprehensive Takaful Adoption Plans, approved by their board and Shariah advisor, outlining their strategy for transitioning to Takaful and aligning with the SECP's plan. These plans may start with an assessment of the insurer's preparedness to meet evolving sector demands, including a gap analysis of policies, products, services, infrastructure, human resources, and areas needing improvement for successful conversion. The adoption plan may also specify the strategy for transition, whether through geographic (branch-wise) conversion or business-specific conversion targeting certain classes of business, SECP maintained. Such plans will enable companies to assess their current operations and identify areas for transformation in both product offerings and operations. This assessment, followed by clear action items for converting existing products and restructuring investment portfolios to align with Shariah principles, will provide a solid foundation for the transition to Takaful. Additionally, the plan should address the transition of operational processes, such as underwriting, claims management, and policyholder surplus distribution. Facilitation for Takaful Licensing and Product Approval To enhance Takaful penetration and foster a more Shariah-compliant insurance ecosystem, SECP may facilitate and promote Takaful licensing and product approvals. SECP could encourage new entrants to obtain licenses as full-fledged Takaful operators rather than conventional insurers, creating a more conducive environment for Shariah-compliant insurance. Additionally, SECP may consider prioritizing the approval of new life insurance products under the Takaful model, encouraging companies to focus on Takaful product development. These measures would support the industry's natural progression towards an Islamic financial framework, contributing to a smoother transition toward a Riba-free economy by 2027, SECP added. Copyright Business Recorder, 2025
Business Recorder
06-06-2025
- Business
- Business Recorder
P2P, Crowd Lending framework: SECP proposes major amendments to potential
ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has proposed major amendments to the potential of Peer-to-Peer (P2P) and Crowd Lending framework in Pakistan. The SECP has invited feedback on a comprehensive Consultation Paper on the Challenges and Potential of Peer-to-Peer (P2P) and Crowd Lending in Pakistan. The paper also included proposed amendments to the Non-Banking Finance Companies & Notified Entities Regulations, 2008, aimed at expanding access to alternative finance. The rapid evolution of financial technologies and the growing demand for inclusive and innovative financing solutions has led SECP to conduct an in-depth review of the existing P2P lending framework. The paper presents a comparative analysis of international regulatory models and best practices to inform policy development. The review identifies several structural and regulatory challenges currently constraining the growth of P2P and crowd lending platforms in Pakistan. These challenges include the absence of securitized lending mechanisms, restrictions on eligible participants, limited options for credit risk diversification, and operational difficulties related to escrow account management. To address these challenges, the SECP proposes a series of amendments to the P2P lending framework. These proposed changes include increasing loan ticket sizes and exposure limits, strengthening governance requirements for NBFCs operating as P2P service providers, ensuring the financial sustainability of P2P platforms, introducing a trust account structure for fund management, enhancing risk disclosures, and introducing IT and cybersecurity standards for platforms. The SECP has invited comments and suggestions from all stakeholders, including P2P platforms, fintech innovators, financial institutions, investors, and the general public. Stakeholder feedback will play a critical role in shaping a forward-looking, risk-sensitive, and enabling regulatory environment for P2P lending in Pakistan. In addition, the SECP also proposed amendments to revise the definitions of SME/MSME and micro-enterprises, enhance credit bureau reporting requirements for lending NBFCs, amend the Code of Corporate Governance applicable to lending NBFCs, and relax the Fit and Proper Criteria for Fintech Startups in the lending space. The Consultation Paper and draft notification of the proposed amendments are available on the SECP website. Comments may be submitted by June 20, 2025, via email to [email protected]. Copyright Business Recorder, 2025
