Chinese Financial Entities Express Optimism Toward Pakistan’s Capital Markets

Cross-border ETFs are on the horizon as the SECP and NAB partner to combat illegal deposit schemes.

ISLAMABAD:

The China Financial Futures Exchange has voiced strong confidence in the trajectory of Pakistan’s capital markets, praising recent initiatives taken by the Securities and Exchange Commission of Pakistan (SECP) to stimulate investment.

In formal correspondence addressed to SECP Chairman Dr. Kabir Ahmed Sidhu, Executive Vice President Yu Hong commended the commission’s investor-centric reforms. Hong noted that the SECP has been instrumental in addressing regulatory and strategic hurdles, thereby facilitating increased Chinese investment in Pakistan’s market infrastructure.

The Chinese consortium highlighted significant progress regarding the Pakistan Stock Exchange (PSX), the Central Depository Company (CDC), and the National Clearing Company of Pakistan Limited (NCCPL). They asserted that these advancements will bolster the development of Pakistan’s capital markets and strengthen international investor sentiment.

Furthermore, Chinese investors signaled their intent to expand their footprint by introducing new financial products at the PSX and investigating the potential launch of cross-border exchange-traded funds (ETFs). The consortium lauded the resolution of long-standing strategic issues under Chairman Sidhu’s leadership, characterizing the outlook for Pakistan’s financial markets as highly promising.

In a separate development, the SECP and the National Accountability Bureau (NAB) have pledged to strengthen their collaboration to aggressively target illegal investment schemes and unauthorized deposit-taking activities.

During a visit to the SECP headquarters, NAB Chairman Nazir Ahmed Butt met with Dr. Sidhu to discuss the formalization of a Memorandum of Understanding (MoU). This agreement will focus on coordinated enforcement, information sharing, and joint investigative actions.

Dr. Sidhu emphasized that illegal deposit schemes often defraud citizens by promising unrealistic returns, leading to devastating financial consequences. He noted that such fraudulent activities undermine public confidence in the formal financial system and jeopardize legitimate institutions, making swift and decisive enforcement a priority.

The meeting concluded with an agreement that enhanced cooperation between the SECP and NAB will ensure rapid responses to violators, reinforce legal enforcement, and provide necessary relief to victims of financial fraud.

Chairman Butt reaffirmed his dedication to working closely with the SECP to eradicate financial crimes and protect public interests. He noted that increased institutional coordination would improve accountability and serve as a powerful deterrent against illegal schemes and other forms of financial misconduct.

The SECP also issued a public advisory clarifying that the mere registration of a company with the commission does not grant it the authority to solicit investments or deposits from the general public. Pursuant to Section 84 of the Companies Act 2017, only banking companies and institutions specifically licensed by the SECP are authorized to accept public deposits; all other entities are strictly prohibited from doing so.

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