The Capital markets of Papua New Guinea along with its regulator the Securities Commission of PNG (SCPNG) will see major reforms in the New Year and following months in a bid to modernize the capital market and improve Governance in the Industry.
This was made known by Richard Maru who is the Minister responsible for the capital market of PNG along with its regulator Security Commission.
In PNG the most common capital markets are the stock market and the bond market. Presently, the PNG Capital market comprises of the primary market and the secondary market.
The primary market is where the new securities are issued and sold, and the secondary market, where already-issued securities are traded between investors. We have a privately owned stock exchange and over 13 companies are listed, all trading equity backed securities in the secondary market.
Since taking up office the Minister for International Trade and Investment Richard Maru is pushing for major reforms over the next few months which are critical to the Marape/Rosso Government sets out to grow the capital market of PNG as a key vehicle to domestic capital for critical investments in helping to grow the economy of the country.
“While our government is going out to attract direct foreign investors, we must develop our domestic capital market to be a major source of capital raising in the domestic market. The government needs to attract more PNG institutional investors in many of our large investments in our proposed Special Economic Zones in the country,” Minister Maru said.
The reforms will be broad and will cover the following areas including SME capital raising platforms, equity crowd funding, debt securities issuance, and reforms in many schemes.
Work has already started with the assistance of the Australian government who have engaged the Asian Development Bank at a cost of K1.3 million to assist the Security Commission of PNG by way of technical assistance.
The Security Commission Act is also being reviewed with major changes to include, the complete separation of board and management of the commission where there will be no longer an executive chairman with the functions and powers to be defined clearly by the amended legislation in 2023.
“Due to the public confusion of the name of the Securities Commission over security companies, even the name of the regulatory body, the Securities Commission will be reviewed,” said Minister Maru.
Minister Maru has also written to the Acting Chairman of the SCPNG, Mr. James Joshua and asked him to remove all stock brokers or market intermediaries to have any shareholding in the Port Moresby Stock Exchange.
Their shares should be sold to Papua New Guinea shareholders who have no conflicts as market intermediaries in the capital market in Papua New Guinea. They have three months to sell their shares as part of the Marape-Rosso government’s clean-up of the capital market under the reforms of the capital market our government is instituting.
“We are keen to develop a world class capital market in Papua New Guinea. We have advertised globally for Directors who will be on the Board of the Securities Commission and for the appointment of a very qualified and experienced CEO for the Securities Commission,” said Minister Maru.
The new Board and CEO will be appointed early in the New Year, 2023 to fill these critical positions.
“These reforms are aimed at making sure the PNG capital market is robust, agile and risk free and we are able to secure and maintain investor confidence for capital formation,” Minister Maru said.
