Regulatory tariffs reduced significantly to make capital market more competitive – Business

The Pakistan Securities and Exchange Commission (SECP) announced Monday that it approved a review of the tariff structures of the National Clearing Company of Pakistan Limited (NCCPL) and the Central Depository Company of Pakistan Limited (CDC).

According to a press release issued by the commission, the decision was made to encourage the development of the capital market and expand the investor base.

"The SECP had advised the CDC and NCCPL to rationalize their respective rate structures in line with international best practices. Subsequently, to convey maximum benefit to shareholders and encourage investments, the board of directors of both companies issued SRO [statutory regulatory orders], announcing a significant reduction in its tariff structures, "the statement said.

Read more:SECP facilitates mutual fund rules

According to the revised tariff structures, the sub-account maintenance fee of the sub-account holders that hold Investor Accounts with CDC has been exempted.

"This will encourage investors to open sub-accounts with CDC to have prudent and secure custody of their investments," said SECP.

The rates for the annual rate of redeemable securities have also been substantially reduced by almost 70 percent to support the corporate debt market. The SECP also approved the reduction of the custody rate for the next two years by 14 and 16 percent by 2020 and 2021, according to the statement.

In addition, SECP has advised the CDC to reduce the limit of the new issue rate for issuers to Rs35 million Rs50mn.

Similarly, the NCCPL has reduced the rate and charges for Collective Investment Schemes (CIS).

"The reduction will directly benefit the owners of mutual fund units, as it will significantly reduce the expense ratio of a fund," the statement said.

In addition, CCPL has reduced its UIN maintenance fee by 50{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5}. In addition, a 20{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} reduction in the monthly fixed rate of the Institutional Delivery System (IDS) and the IDS transaction rate for CIS have been announced.

"The annual tax rate on capital gain has also been reduced for small local investors. In order to improve volumes in the leveraged market, the margin financing transaction fee applicable to finance has been completely abolished." said the regulator.

"The reduction in regulatory charges will further minimize costs related to investors in different segments of the equity and debt markets and make it a more competitive investment path."

"The SECP continuously strives to introduce measures to simplify and reduce the cost of doing business to facilitate investors and build confidence in the capital market in Pakistan."



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