ISLAMABAD: To promote the culture of self-regulatory organizations (SROs), the Securities and Exchange Commission of Pakistan (SECP) has issued the Self-Regulatory Organizations (Registration) Regulations, 2022. These regulations will aide in corporate sector development, improved financial services and better protection for the interests of investors and other stakeholders.
SRO Regulations, 2022 provide a framework for registration of self-regulatory organizations (SROs), including specifying the form and manner of registration as an SRO under the SECP Act, 1997. They also specify minimum paid-up capital requirements for companies desirous of registration as an SRO, along with the “fit and proper criteria” applicable on promoters, directors, chief executive and chairperson of board of directors of an SRO.
Self-regulation is an important globally practiced mechanism for encouraging industry participation to impose self-discipline. An SRO exercises certain level of authority over an industry and typically has some powers to create and enforce standards in an industry. They instill deeper acceptance of ethical behavior and principles as the rules are based on social norms and market conduct instead of a top-down regulatory approach.
The Self-Regulatory Organizations (Registration) Regulations, 2022 are available at https://www.secp.gov.pk/document/self-regulatory-organizations-registration-regulations-2022/