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Investor Relations Seminar (PowerPoint)

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					Investor Relations Seminar



 Securities & Exchange
Commission of Pakistan

        Khalida Habib, Director SECP
                          July 29th, 2011
Outline

   SECP’s Mission
   SECP’s Mandate
   Investor’s Rights under the Law
   SECP’s Regulations- Disclosure Based
   Corporate Disclosure Requirements
   Code of Corporate Governance
   Disclosure Regional Scenario
   SECP’s Measures for Investor Protection
   Future Measures
SECP’s Mission

 To protect investors, maintain
 fair, transparent, and efficient
 markets, and facilitate capital
 formation.
Mandate of SECP

 To maintain the confidence of
 investors in the securities
 markets by ensuring adequate
 protection to investors.
Investor/Shareholder
rights
   Basic shareholder rights are in place.

   Ownership registration is secure and in the
    process of being dematerialized through CDC.

   Shareholders can demand a variety of
    information directly from the company and
    have a clear right to participate in, and to be
    sufficiently informed on, decisions concerning
    fundamental corporate changes
Investor/Shareholder
rights
   Investors have the right to participate and
    vote in AGM.

   The Law provides protection to investors
    from any misuse of power by the Board of
    Directors through provisions for conflicts of
    interest and Related Party Transactions.

   Investors have the opportunity to obtain
    effective redress for violation of their rights
    by lodging complaint with SECP
SECP’s Regulation
Disclosure based (DBR)
   The onus of assessing and determining the investment merits of
    any securities offering rests with the investors while the SECP
    regulates the disclosure of material information.

   SECP’s regulations focus on three segments These are:
     – Disclosure
     – Due Diligence
     – Corporate Governance
Disclosure


  •Disclosure of information benefits investors by
  facilitating them to make investment decisions
  both in primary and secondary market.

  •Directors of public companies are responsible to
  ensure that all material information required to
  make investment decisions is provided accurately,
  in full and on a timely basis.
Due Diligence

Due diligence is imperative to ensure that information to be disclosed is
true, sufficient and timely.

    • Directors of public companies must ensure that the information to
    be released is accurate and timely.

    •Due care must also be given to ensure that there is no omission of
    material information.

    •Information that can affect the trading activities and prices of the
    company's securities must be released immediately.

The onus then lies with the investor to consider and weigh the
information provided before making decisions.
  Corporate Governance

The timely, accurate and transparent disclosure of material
information is an integral component of ensuring good corporate
governance.

Boards of directors of companies need to be open and transparent
in handling corporate activities and transactions.

Apart from compliance with laws and regulations that constitutes
one aspect of ensuring that directors perform their fiduciary duties
properly, compliance with code of Corporate Governance is also
mandatory.
Corporate Disclosure
Requirements
   The Companies Ordinance 1984 and the Code of Corporate
    Governance 2002 sets the disclosure requirements ensuring
    the Quality and Timeliness of Financial Disclosure
   Requirements are in place for disclosure of financial and
    operating results, beneficial ownership and related party
    transactions.
   International Accounting Standards and International Financial
    Reporting Standards are applicable.
   Independent audit is undertaken annually to ensure that
    financial statements fairly reflect the company affairs.
   Channel for disseminating information provide for equal,
    timely and efficient access to information.
Code of Corporate
Governance
   For protection of Investors and to maintain confidence in the market
    the SECP issued Code of Corporate Governance in 2002. For more
    transparent markets the Code entails various disclosure requirements
    which need to be complied with by Public listed companies.


   Salient features of the Code of CG:
       - Restructures composition of BoD
       - Emphasizes openness and transparency in corporate affairs
       - Requires strengthening of corporate working, internal control system and external
        audit requirements


    The Code 2002 is currently in the process of being amended as per
    stakeholder concern and international best practices.
Corporate Disclosure- South Asian Scenario
Protecting Investors Data (2004)                                                          Indicator

                                                               Bangladesh   India         Nepal        Pakistan        Sri Lanka

Is family ownership disclosed?                                    No         No            Yes            No              No

Is indirect ownership disclosed?                                  No         No            Yes            Yes             Yes

Is beneficial ownership disclosed?                                Yes        Yes           No             No              No

Is information on voting agreements between shareholders          Yes        No            No             Yes             No
disclosed?

Are internal audits required before releasing financial           No         Yes           No             No              Yes
statements?

Is an external auditor required?                                  Yes        Yes           Yes            Yes             Yes

Is ownership and financial information publicly available to      No         Yes           No             Yes             Yes
investors?

Disclosure Index                                                   3         4              3             4                4

The Disclosure Index is calculated using the above data (one point for each "Yes"). The index varies between 0 and 7, with higher
values indicating more disclosure.
SECP - Investor
Protection
   SECP considers that educated and careful investors are so
    critical to the functioning of efficient markets. To help support
    investor education, the SEC offers the public a wealth of
    educational information on this Internet website .
   Besides, following measures are taken to inform and protect
    investors;
     – Public disclosure of enforcement actions taken by the SECP
     – Web-placement of Rules, Regulations and important documents
       pertaining to the SECP’s regulatory ambit
     – Web-placement of series of Guides to educate investors on
       various aspects of investment
     – Handling of investor’s complaints in an efficient manner.
     – All other information deemed to be in the interest of investors
       through media releases and web placements.
Future Strategy
   Developing an online complaint handling system with status updates
    for ease of handling and investor protection
   A dedicated website focused towards investor education and
    awareness
   24 hour Automated helpline for investors in both English and Urdu
   Publication of Investor Guides in Urdu
   Comprehensive Investor Education Plan focusing on different market
    segments through seminars in various cities of Pakistan
   Media strategy based on informing investors over the activities of the
    SECP
   Mandatory compliance of listed companies with the revised Code of
    Corporate Governance
   Corporate Social Responsibility policy of the SECP.
Thank You

				
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