Islamabad August 11 2023: The Securities and Exchange Commission of Pakistan (SECP), in order to promote best governance practices and maintain focus on core operations, has introduced maximum terms limits for the Chief Executive Officers and Independent Directors to serve in the Capital Market Infrastructure Institutions (CMIIs) i.e. PSX, NCCPL, CDC and PMEX.
SECP has introduced tenure limits upon CEO of a CMII to a maximum of three terms with the third term to be allowed only in case of exceptional performance and subject to a competitive selection process. Moreover, the tenure limits for independent directors have been capped at maximum three terms across all CMIIs. Further, no individual shall serve as independent director on the board of the same CMII for more than two terms.
CMIIs perform important public policy functions including the infrastructure, services and regulations. It is expected that these reforms will encourage greater participation by professionals in the governance of the CMIIs and promote a culture of independence, accountability and objective decision making.
Earlier, the Chairman (SECP), Mr, Akif Saeed during his meetings with the boards of directors of CMIls last week, stressed upon the need for CMIls to follow the highest standards of corporate governance while discussing other reforms aimed at product development, risk management, debt market development and enhanced cybersecurity.
The Commissioner SECP. Mr. Abdul Rehman Warraich stressed upon the need of appropriate distribution of responsibility between BOD and management, a transparent and equitable compensation structure, proper succession planning and ensuring boards' independence.
The limits have been imposed by approving amendments to licensing regulations of CMIls.