Home »Supplements » Demutualization of Stock Exchanges: Preparing for the Quantum Leap

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  • Dec 20th, 2012
  • Comments Off on Demutualization of Stock Exchanges: Preparing for the Quantum Leap
The demutualization of Pakistan's stock exchanges is a seminal event in the history of the country's capital market, creating opportunity for the exchanges to take a quantum leap into the future. The change from non-profit organisation to public limited company with both regulatory and commercial objective means building on the regulatory reforms already executed to enhance investor security, improvement in professionalism and technical competence of security industry and technological improvement in operating systems.

The commercial objectives of enhancing shareholder value, demutualization means that stock exchanges have to significantly broaden and deepen the size of Pakistan's capital market, In the above context, the Karachi Stock Exchange is focusing on two fronts. As a front line regulator the organisation is being divided into a regulatory structure, headed by a Chief Regulatory Officer (CRO) reporting to the Board's Regulatory Affairs Committee made up entirely of SECP nominated independent directors. This is responsible for framing regulations and ensuring their compliance and enforcement to guard investor & public interest in close co-ordination with the Securities & Exchange Commission of Pakistan. The managing director is now responsible for repositioning the commercial structure on customer service excellence, increase in productivity and reduction in cost base. A major investor awareness generation programme is under way to broaden market size and a focused effort is planned to attract iew companies to list on the Exchange. Finally, new innovations include market makers' induction for KSE-30 Index cash settled futures contacts. Initiatives are also at advanced stages to cross-list regional ndices to provide investors a larger spectrum of asset classes. New areas such as ETF's, Options trading, SME Exchange and growth of debt market are under active consideration. I am confident that stock exchanges are ready to take a quantum leap into the future and fulfil their raison detre: providing long term capital to industry and vibrant investment opportunities for savers.

Copyright Business Recorder, 2012


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