Financial Market Development Activity Annual Progress Report (July - Sept 2018)

A comprehensive Inspection Manual for SECP's inspection teams was submitted by FMD's international AML consultant. This manual enables SECP's inspection teams to conduct risk-based assessment and monitoring of its regulated entities, addressing FATF concerns and contributing to AML-related security in the country. FMD accomplished a major milestone in building industry consensus for its Private Equity market regulatory reform agenda through an advocacy event in Karachi. Over 30 top industry representatives convened with PE market regulators from SECP, speaking to the need for regulatory liberalization and presenting market support of FMD's private equity funds reforms. FMD's international eWRS expert, Dr. Andre Van der Vyver, completed his second visit to provide critical technical support to the Maize pilot project. He delivered the final pilot design, developed a comprehensive monitoring and evaluation system, and customized and integrated the selected software. Dr. Andre also participated in an awareness seminar held for the inauguration of the pilot project in Okara, detailing the warehousing receipt systems. FMD successfully delivered four 5-day Train-the-Trainer (ToT) sessions on Capital Markets and Fixed Income Investment in Karachi, Peshawar, and Lahore. Over 70 senior officials from banks, asset management companies, brokerage houses, and public sector entities participated in the training, supporting long-term training capacity and skill enhancement of market actors in Pakistan. The FMD team supported the development of the KPK Government's medium-term debt strategy along with the establishment of KPK's Debt Management Unit. As a result, KPK's Finance Department built a detailed strategy for sustainable debt levels and risk mitigation techniques. The FMD team is providing ongoing training and technical support to ensure that designated KPK staff have sufficient training to complete the process of populating the newly created loan portfolio database. These efforts enable KPK to effectively track outstanding debt and to establish accurate fiscal estimates for needed debt service expenditures. FMD provided recommendations to reform the Pakistani Private Equity (PE) regulatory framework. The organization facilitated necessary advocacy and sensitization to raise awareness within the PE industry in Pakistan of both the need for and the pathway to regulatory reforms. A second advocacy workshop was held in Islamabad on August 30, 2018, focusing on the current regulatory framework and the need to address major bottlenecks through policy, legislative, and regulatory measures. The workshop included a presentation on the business model, structure, and applicable regulatory process concerning PE funds, as well as a detailed account of the legal and regulatory restrictions constraining the growth of the PE business.