The Lahore Stock Exchange (LSE) has informed the Competition Commission of Pakistan (CCP) that it has initiated the process of amending the requisite regulations in the LSE’s Listing Regulations, as recommended by CCP in its Policy Note issued to the Securities and Exchange Commission of Pakistan (SECP). CCP had 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 proposed amendment which had been forwarded for gazette notification includes 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. If approved, the amendment could lead to the creation of a monopoly position of PICG, by recognizing its certification only. The CCP is 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 restricts competition. Such a measure could retard incentives for quality improvement by the dominant player, and limits consumer choice both in cost and location. CCP welcomes the decision of LSE to initiate the process of amending its regulations to address the competition concerns therein.
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