Securities Market Division

Securities market division is responsible of monitoring, regulating and developing securities market. It
regulates the activities of markets in which newly issued securities are traded, markets in which
previously issued securities traded and it also regulates the market intermediaries (brokers) through
registration, monitoring, investigation, enforcement and rule making with objective of protecting
investors interest. It also processes and gives approval to prospectuses for public offering of both debt
and equity securities.
The division consists of the below mentioned departments:
Policy, Regulation and Development Department
Market Supervision and Registration Department
Market Surveillance and Special Initiative Department
Policy, Regulation and Development Department
Stock Exchanges, Depository and Clearing House Wing
SEDC deals with making the regulatory framework of the three stock exchanges, the CDC (central
depository company) and the NCCPL (National Clearing Company Pakistan Limited). This involve
planning regulatory framework for these capital market entities for improved risk management in their
operations and procedures, introduction of new products and systems, good governance, increased
transparency and improved investor protection etc.
The Wing is actively involved in the :
Development of new products
Systems for the equity markets
Providing new ways of liquidity and investment alternatives to the investors and the market
participants
Improving efficiency and efficacy of the procedures in place at these entities
Commodities and Derivatives Wing:
The CC is presently responsible for:
Making the regulatory framework and for continuously reviewing the existing regulatory framework of
the Pakistan Mercantile Exchange Limited (PMEX) for improved risk management
Introduction of new products and systems
Good governance and transparency
Improved investor protection and for adjusting to the changing local and international market needs.
The CC is involved in:
Diversifying the existing product portfolio of the Pakistan Mercantile Exchange Limited (PMEX) in
commodities and currencies by introducing products targeting hedging and speculative needs of
various market segments for enhancing activity and for broadening the investor base. This includes
introduction of new commodities and currencies futures contracts and changes to the contract
specifications of the existing contracts in line with international best practices and persistence of these
contracts according to the local market needs. The Wing processes registrations of commodities
exchanges on behalf of the Commission.


Debt Capital Market Wing:
The DCM is responsible for:
Devising SECP reform agenda for the organized development of an active and transparent
secondary debt capital market in Pakistan.
Carrying out reform initiatives to address current shortcomings in the existing structural,
regulatory and operational framework of the debt market for more harmonize development of
the Pakistani capital markets as a whole.
The Wing is involved in:
Developing and reviewing policies
Regulations for the debt market
New product development
System enhancements based on international legal standards and best practices.
Capital Issues Wing
The Capital Issues Wing (CIW) responsible for the cases related to:
Approval of prospectuses for public issue/offer of securities. The prospectus of any company
inviting public subscription for its securities is required to be approved by the SECP under the
Companies Ordinance, 1984 prior to its issue and its circulation and publication.
CIW also processes cases regarding issue of:
Securities outside Pakistan under Section 62-A of the Companies Ordinance, 1984
Registration of Special Purpose Vehicles (SPV) under the Companies (Asset Backed
Securitization) Rules, 1999,
Relaxation from the requirements of the Companies (Issue of Capital) Rules, 1996
Pertaining to Initial Public Offerings and cases reported under Section 18-A of the Securities
and Exchange Ordinance, 1969 which restrict submission of more than one application by a
single applicant for subscription of shares.
Market Supervision and Registration Department
Beneficial Ownership Wing
Beneficial Ownership Wing is responsible :
To monitor the trading activities of specified officers and more than ten percent shareholders of all
listed companies in order to protect the interest of small shareholders of the listed companies. Such
beneficial owners are discouraged to make windfall gain. Thus, incompliance of Section 222 of the
Companies Ordinance every director, chief executive, chief accountant company secretary etc. and
every person who is a beneficial owner of more than 10 ten percent of a listed equity security is
required to file a return of beneficial ownership on Form-31 within 30 days of the attaining of status of
beneficial owner and to report changes in shareholding on Form-32 within 15 days of the change. The
said returns of beneficial ownership are examined to detect the cases where the gain has been made
on account of purchase and sale or sale and a purchase transaction made within the period of six
months. Such amount of gain is recoverable as an arrear of land revenue.

Compliance and Inspection Wing
This Wing ensures to meeting of relevant rules and regulations by the Stock Exchanges and other
market intermediaries to strengthen the market oversight and enforcement through off-site inspection.
The off-site inspection mostly comprises of reporting, as per prescribed format and frequency to the
Commission by the regulated entities. Identify potential high-risk areas the Wing also plans to
undertake inspection of books and records of the members of the stock exchanges. On-site inspection
involves a detailed and comprehensive review of policies, procedures and internal control systems,
established to assure compliance with the rules and regulations and to assess financial health of the
entity.

Brokers Registration and Investor Complaints Wing
The Wing is deals with registration of brokers and agents and handling investor complaints. The
registration of brokers and agents establishes a direct regulatory connection for ensuring investor
protection and observance of Code of Conduct annexed to the Brokers and Agents Registration Rules,
2001. In an effort to ensure investor protection and provide relief to aggrieved investors, it works in
close coordination with stock exchanges. In case of defaulting members, it works diligently in
monitoring the default procedures to provide relief to investors aggrieved by such defaults.

Market Surveillance and Special Initiative Department (MSSID)

Market Surveillance Wing
The Wing deals with monitoring and vigilant surveillance of the trading activities at the three stock
exchanges to ensure that market participants are not exposed to any unfair play. The Wing keeps a
close watch on price movements of scrips, monitors abnormal prices and turnover through state of the
art Surveillance Software. It also detects cases of market manipulation, front running and insider
trading and conducts detailed investigations and inquiries in such cases.

Special Initiative Wing
This wing is responsible for the running of the special projects assigned to it.