KARACHI, Feb 10: Chairman Securities and Exchange Commission of Pakistan Dr Tariq Hassan has appreciated the positive contribution of Karachi Stock Exchange in adopting first generation reforms initiated by the SECP.

A press release issued by the KSE said that the SECP chairman visited the KSE along with Commissioner (Securities Market) Shahid Ghaffar on Thursday.

The SECP chairman addressed the newly-constituted KSE board of directors. The press release said that Mr Tariq Hasan commended the efforts of the Exchange in expeditious resolution of investors' complaints and implementing SECP's time-bound action plan to completely phase-out COT (badla) by June 2005.

Chairman KSE Board of Directors Yasin Lakhani highlighted the recent growth of the market and ongoing market promotional activities. He acknowledged the role of SECP in introducing series of reforms at the Exchange, which was one of the factors that contributed in the unprecedented growth of the market, Mr Lakhani said.

He requested the SECP chairman to allow comparatively more time to the KSE, in future, to formulate its views, on draft rules and regulations, pertaining to the share business. He observed that more frequent consultative process between the Commission and the KSE in the formation and strengthening of regulatory framework would supplement efficiency and accuracy.

While recognizing the role of KSE Board of Directors towards promoting governance and transparency in the market, Dr Tariq Hassan advised that the KSE itself, should adopt the Code of Corporate Governance, in its true spirit and become a role model for the entire listed companies, in respect of good and objective governance. He said that the prime task for KSE Board, in the year 2005, was to change the perception about market manipulation, market abuse and undesired speculation.

The SECP chief made emphasis on strict and stringent risk management measures, improvement and strengthening of existing market surveillance and control function at the Exchange. He said that risk management and market monitoring and surveillance, were the paramount management functions of the Exchange and being frontline regulator and Self Regulating Organization (SRO), the KSE should become more vigilant and alert in the present market surge.

He informed the KSE Board that the commission is contemplating to carryout a regulatory audit of the Exchange, to examine its performance in conducting its functions as a SRO and frontline regulator. Dr Hassan, while concluding, advised the Exchange to ensure timely completion of the process of demutualization and further assured fullest cooperation and support to the Exchange, in the areas of market development and introduction of new products.

KSE Managing Director Moin M. Fudda expressed his gratitude to the SECP for the continued guidance and support to the bourse. He assured the SECP chief that in 2005 the Exchange would continue to make all possible efforts to accomplish its short-term goals of promoting new listings, increasing the free-float of existing listed companies, promoting the best international practices and improving the operational efficiency and automation level of the Exchange.