Karachi: A joint sitting of the Parliament has finally passed the Stock Exchange (Corporatization, Demutualization and Integration) Bill, 2009 for the growth and strengthening of capital markets in Pakistan.
According to Alfalah Securities Limited, the Stock Exchange (Corporatisation, Demutualization and Integration) Bill, 2009 would create a balance among the interests of different stakeholders in the corporate and governance structure of a stock exchange and to segregate ownership and trading rights. The new bill of stock exchange involves converting a mutually owned company to a company owned by shareholders, the conversion of a stock exchange ‘limited by guarantee’ to ‘limited by shares’ and it segregates ownership and trading rights.
To proceed the process each stock exchange is required to submit to the Commission, within forty-five days of the commencement of this Act, a valuation of the stock exchange approved by the committee at any date that may be specified by the Commission, based on the discounted cash flow or net asset value of the stock exchange, or any other internationally accepted method of valuation undertaken by a approved international investment bank. The Commission may also extend the time for submission of valuation of the stock exchange till 120 days from the commencement of the new act.
The shares of a stock exchange shall be listed, on any such stock exchange and within the stipulated time frame. Where the shares of a stock exchange are listed on itself, the Commission shall act as the front line regulator of such stock exchange and will have the necessary powers and authority to regulate and administer all the related laws, rules and regulations.
Any two or more stock exchanges may, upon filing of a scheme of integration, and after compliance with such procedures as may be prescribed, be integrated by an order of the Commission, so as to transfer and vest in the successor stock exchange.