CCP’s recommandations incorporated by SECP.

Islamabad,  27-08-2010

The Competition Commission of Pakistan (CCP) commends the decision of the Securities and Exchange Commission of Pakistan (SECP) to incorporate changes suggested by CCP in the Code of Corporate Governance. CCP issued a policy note to SECP on 12 July 2010 recommending revocation of amendments made to the Karachi Stock Exchange (KSE) Listing Regulations on 22 June 2010. The amendments included a clause requiring directors of all listed companies to get a certification of “The Board Development Programme,” offered by the Pakistan Institute of Corporate Governance (PICG) at a cost of Rs. 200,000 per director. The amendments would virtually have created a monopoly position of PICG, by recognizing its certification only. CCP was of the view that although qualification requirements for certain posts is a globally recognized phenomenon, specifying a certain institution only in this case amounts to creating entry barriers for other educational institutions, and hence prevents competition. Such a measure could retard incentives for quality improvement by the exclusive player, and limits consumer choice both in terms of cost and location. SECP Chairman Mr. Salman Ali Shaikh, in his letter of 24 August 2010 addressed to the CCP Chairperson Ms. Rahat Kaunain Hassan stated that SECP has given due considerations to the competition concerns raised in the CCP Policy Note and that SECP understands the need to discourage any entry barriers that may lead to the creation of a monopoly and prevent competition in the market. “The amendment recommended by CCP has already been incorporated in the revised draft of the Code of Corporate Governance that specifies the mandatory training requirements for directors of listed companies broadly prescribing the detailed requirements of the program that may be offered by the PICG as well as other institutions recognized for the purpose by SECP,” the letter stated.