October 3, 2002	Thursday	Rajab 25, 1423

ISLAMABAD, Oct 2: Securities and Exchange Commission of Pakistan (SEC) will establish an Institute of Corporate Governance to train its own staff and that of stock exchanges in managing the equities market in conformity with the best practices.

This was stated by the SEC Chairman, Khalid A. Mirza, at a press conference on Wednesday. He explained the salient features of a new project being launched in collaboration with the United Nations Development Programme (UNDP).

UNDP has committed $100,000 for the project which is aimed at encouraging compliance with the principles of good corporate governance.

Onder Yucer, Resident Representative of UNDP was also present on the occasion.

The SEC chairman said that it had taken several steps to improve governance structure of the three stock exchanges and infuse discipline in the capital market. It now planned to introduce long-term reforms in the corporate sector, with prime focus on corporate governance.

Responding to a question, Mirza rejected the impression that the reforms were “too aggressive”. These were neither aggressive nor harsh, he said, pointing to other countries where the brokers had been completely ousted from the boards of directors of stock exchanges.

On the other hand, Mirza said, he acknowledged the role of the brokers. Nevertheless, only those markets of the world had developed where exchanges were run independently of brokers.

While majority of the brokers considered the SEC reforms beneficial, only a few vested interest felt unease by them.

The reforms were devised by the Commission very carefully and by taking into view the objective situation prevailing in the country. One of his repeated pieces of advice to his staff, he added, was to enforce only those measures that could be absorbed by the market, he added.

Broadly, he said, the UNDP-assisted project would aim to develop a sound corporate governance framework in Pakistan.