January 11, 2003	Saturday	Ziqa'ad 7, 1423

ISLAMABAD, Jan 10: The chairman, Securities and Exchange Commission of Pakistan, Khalid A. Mirza has advised the independent managements of stock exchanges to perform their regulatory function more efficiently.

Addressing the senior management and the Board of Governors of the Lahore Stock Exchanges, according to SECP press release here on Friday, he pointed out that the exchanges were also the frontline regulators. The managements, therefore, needed to be more responsible to issues faced by the listed companies, he added.

The mechanism of redressing investor’s complaint needed to be strengthened further, he stressed and pointed out that the recent market rise was due to enhanced investor’s confidence. This, in turn, was attributable to the implementation of regulatory reforms.

Mirza said, the exchanges need to focus on development of the market by expanding their retail network. “They have to respond to the regional and international challenges in order to survive in a competitive market,” he remarked.

The exchange should seriously consider the option of demutualisation, which has been accepted internationally as vital to running exchanges as efficient and transparent business houses, the SECP chief added.

Agreeing with him, the directors in their comments said that the LSE had already made some progress in this direction. The LSE, they disclosed, had considered the demutualisation option at the board level as well as member level.

“Significant progress may be forthcoming in this area in the near future,” they stated.

They, however, suggested that a merger of the three stock exchanges should be given serious consideration to realise cost savings and a larger single market.