Chittagong, 24th May 2005
The two-day meet - 5th Annual General Meeting and 8th Theme Conference of the South Asian Federation of Exchanges (SAFE) recently concluded at a local hotel in Islamabad, Pakistan, hosted by the Islamabad Stock Exchange (ISE) on 13th and 14th May 2005.
During the conference a Regulators’ Forum was set up to guide and patronize SAFE's efforts to harmonise listing regulations in order to begin cross-border trading in the long run. The Regulators Forum was established by signing a Memorandum of Understanding (MoU) between the Securities and Exchange Commission of Pakistan (SECP) and its counterpart regulatory bodies from Bangladesh, Nepal, Bhutan and Mauritius. SEBI India, SEC Srilanka and Maldives Monetary Authority are expected to join hands soon. The MoU, which was signed at the Pak Prime Minister’s House on Friday, 13th May, establishes a voluntary and co-operative body, called the “South Asian Securities Regulators Forum” for increasing mutual co-operation and exchange of information among member countries. The regulators had held a meeting earlier in the day to discuss and finalize the MoU.
While addressing the signing ceremony, Pak Prime Minister Shaukat Aziz urged the capital market regulatory bodies and bourses in the region to establish greater level of co-operation and co-ordination among them and expressed hope that the measure would enhance mutual co-operation and co-ordination amongst the financial sector regulators in the region. He also appreciated the measures taken by SAFE to achieve the broader objectives of the SAARC.
Earlier, while speaking as the chief guest on the inaugural session of the 8th Theme Conference of SAFE at a local hotel in Islamabad, Adviser to the Prime Minister on Finance, Dr Salman Shah stressed the need for an integrated capital market in Asia on the line of European Union (EU). He said corporate sector must be fully regulated to rehabilitate the trust of the investors.
Dr Tariq Hassan, chairman, Securities and Exchange Commission of Pakistan (SECP) said, that the objectives of the South Asian Securities Regulators Forum would be to: (i) promote co-operation amongst South Asian regulators for fostering a common understanding on regional regulatory issues and facilitating regulatory activities; (ii) sharing of information and experiences; and (iii) harmonisation of regulations, policies and financial reporting systems.
“The forum will provide technical expertise for capacity-building within regulatory agencies and the industry. It will develop and publish guidelines, manuals, codes of conduct etc. on conduct of current and emerging regulatory issues”, Dr Hassan said.
Dr Hassan said the implementation of uniform corporate governance standards as well as the enactment of disclosure and documentation standards in line with international best practices would undoubtedly facilitate convergence of markets in the South Asia region. He said with effective channels of coordination and cooperation in place and a consistent regulatory structure prevailing in the region would then move to the final phase i.e. cross border business transactions in the capital markets.
The transactions might involve cross border trading through remotely situated financial intermediaries, investors directly trading through advanced communication systems such as internet or other electronic communications networks, as well as raising of capital of a company in the foreign jurisdiction through cross border listing, he said. He said the introduction of newer financial products as well as the means of trading
might be gradually phased in. He said SAFE is trying to create a borderless capital market so in the future the region could envisage the establishment of a single relatively seamless common market, as was the aim of the European Union.
In a joint declaration issued on Saturday, 14th May at Islamabad, the SAFE members decided to focus on investors' protection measures, and to harness resources and share experiences of each other with the objectivity and optimism for creating a conducive climate for investment towards the growth of the securities markets of the region.
The SAFE assembly elected a new executive committee with Rajinikant Patel, chief executive, Mumbai Stock Exchange (BSE) as the chairman and Abdul Waheed Jan, chairman, Islamabad Stock Exchange as the vice-chairman of the Federation. The assembly also adopted Maldives Stock Exchange as a new member of SAFE. SAFE assembly also selected Islamabad as the venue for the permanent secretariat of the SAFE, to be established within next three months.
The SAFE meeting ended with the resolve that all 12 exchanges of the eight countries of the South Asian region would work closely to integrate their stock market for enhancing the economic cooperation on the member states.
__________________________
For: Chittagong Stock Exchange