intoduction

The Securities and Exchange Commission of Pakistan has been

regulating the Insurance industry, since January 2001 after it took
over from the Controller of Insurance operating under Ministry of
Commerce, Government of Pakistan. The SECP regulates and
monitors the Insurance Sector in the country through powers vested
in the Insurance Ordinance, 2000 and the Companies Ordinance,
1984.

The Securities and Exchange Commission of Pakistan (SECP) is the
financial regulatory agency in Pakistan whose objective is to develop
a modern and efficient corporate sector and a capital market based
on sound regulatory principles, in order to encourage investment
and foster economic growth and prosperity in Pakistan.[1]


Securities and Exchange Commission of Pakistan
Agency overview
Formed January 1, 1999
Preceding Agency Corporate Law Authority
Jurisdiction Pakistan
Headquarters Pakistan Islamabad, Pakistan
Agency executive Position is vacant, Chairman
Website http://www.secp.gov.pk


History
The Securities and Exchange Commission of Pakistan (SECP) is the
successor of the erstwhile Corporate Law Authority (CLA), which was
an attached department of the Ministry of Finance. The process of
restructuring the CLA was initiated in 1997 under the Capital Market
Development Plan of the Asian Development Bank (ADB). A
Securities and Exchange Commission of Pakistan Act was passed by
the Parliament and promulgated in December 1997. In pursuance of
this Act, the SECP, having autonomous status, became operational
on January 1 1999. [2] The Act gave the organization the
administrative authority and financial independence to carry out the
reform program of Pakistans capital market.
The scope of the authority of the SECP has been extensively widened
since its creation. The insurance sector, non-banking financial
companies, and pension funds have been added to the purview of
the Commission. Now the SECP's mandate includes investment
financial services, leasing companies, housing finance services,
venture capital investment, discounting services, investment
advisory services, real estate investment trust[3] and asset
management services, etc. The SECP also regulates various external
service providers that are linked to the corporate sector, like
chartered accountants, rating agencies, corporate secretaries and
others.


Vision
The development of modern and efficient corporate sector and
capital market, based on sound regulatory principles, that provide
impetus for high economic growth and foster social harmony in the
Country.

Mission
To develop a fair, efficient and transparent regulatory framework,
based on international legal standards and best practices, for the
protection of investors and mitigation of systemic risk aimed at
fostering growth of a robust corporate sector and broad based
capital market in Pakistan.

Strategy
To develop an efficient and dynamic regulatory body that fosters
principles of good governance in the corporate sector, ensures
proper risk management procedures in the capital market, and
protects investors through responsive policy measures and effective
enforcement practices.

Organization
The SECP is a collegiate body with collective responsibility.
Operational and executive authority of the SECP is vested in the
Chairman who is the SECP's Chief Executive Officer (CEO). He is
assisted by four (4) Commissioners, particularly to oversee the
working of various operational units as may be determined by him.
The SECP is divided into the following five divisions:
Company Law Division
Securities Market Division
Specialized Companies Division
Insurance Division
Company law devision
The Company Law Division is divided into following two
Departments:

Corporatization & Compliance
Enforcement

Corporatization & Compliance Department
The Corporatization & Compliance Department is responsible for
administration of the Companies Ordinance 1984, and the rules and
regulations made there under along with other relevant laws. Its
primary functions include registration of companies, regulating their
statutory functions, and monitoring of corporate compliance through
examination of statutory returns and accounts. These functions are
performed by the eight regional offices of the SECP, the Company
Registration Offices (CROs). The Corporatization &
Compliance Department supervises, coordinates, and monitors the
workings of the CROs.

Enforcement Department
The Enforcement Department is responsible for regulation and
enforcement of companies listed on stock exchanges, public un-
listed and private companies having paid-up capital of Rs. 7.5 million
and above and companies formed under section 42 of the
Companies Ordinance, 1984 (except insurance companies, non-
banking finance companies and modarabas) with relevant laws and
applicable accounting standards through review of accounts,
investigation, and prosecution. In case of non-compliances,
necessary actions are taken against erring companies, their
directors, management and auditors, as appropriate.
Securities market devision
The Securities Market Division (SMD) is responsible for monitoring,
regulating, and developing the securities market. It regulates the
primary and secondary markets as well as market intermediaries
through registration, surveillance, investigation, enforcement, and
rule making, with the objective of protecting investors interest. SMD
also processes and grants approvals to prospectuses for public
offering of both debt and equity securities. In addition, it is entrusted
with instituting appropriate regulatory reforms to develop and
promote the market, engender investor confidence and instill
transparency, effective risk management and good governance at
the three Stock Exchanges, Pakistan Mercentile Exchange, Central
Depository Company and National Clearing Company.

The division consists of the below mentioned departments:

Policy, Regulation and Development Department
Market Supervision and Registration Department
Special Initiative Department


Specialized company devision
About the Division
The SCD strives to provide a regulatory environment which is
conducive for development and promotion of a robust Non-Bank
Financial (NBF) Sector. The NBF sector under SCDs preview
comprises of Non Bank Finance Companies (NBFCs), Mutual Funds,
Pension Funds, Real Estate Investment Trusts, Private Equity Funds,
Modaraba Management Companies & Modarabas. The major
functions performed by SCD for the NBF Sector include: licensing,
registration, regulation, on-site inspection, off-site surveillance and
enforcement. The underlying objective is to safeguard the interest of
the stakeholders while at the same time facilitate diversification and
innovation in products and services of NBF sector.

For operational ease and enhanced efficiency, the SCD has been
divided into two main Departments:

1. Policy, Regulation and Development Department (PRD)
2. Supervision Department (SD)

Policy, Regulation and Development Department (PRD)
PRD performs the functions of licensing, registration, provision of
comprehensive regulatory framework and granting necessary
regulatory approvals to the NBF sector.
Supervision Department (SD)
SD is primarily responsible for centralized functions of On- site
Inspection, Off-site Surveillance and Enforcement.
Insurance devision
Role of SECP in Insurance Sector
The SECP, being the apex regulator of the insurance industry, has a
strategic priority and commitment to strengthen and maintain an
effective regulatory environment in which insurance and takaful
business can flourish and prosper. To strengthen SECPs role as an
effective facilitator for sound development of the insurance and
takaful industry and to achieve the underlying objective of raising the
insurance penetration level, the following key areas have been in
focus of SECPs efforts:

Protection of the interest of insurance policyholders.
Amendments in the regulatory framework to strengthen SECPs
role as an apex insurance regulator.
Enhancement of regulatory framework for Takaful Insurance.
Availability of insurance protection to less privileged segment
of the society (Microinsurance).
Insurance Awareness Programs.
Enhanced public image of the insurance industry.

Insurance Division has been divided into two main departments:

1. Policy, Regulation and Development Department
2. Supervision Department

Policy, Regulation and Development Department
Responsible for policy reform, actuarial work, re-insurance treaty,
facultative reinsurance approval, NOC for purchasing insurance
policy from abroad, registration and de-registration.



Supervision Department
Responsible for centralized function of On-site Inspection, Off-site
Surveillance and Enforcement.