ISLAMABAD, Dec 12: Accepting the directive of the Securities and Exchange Commission of Pakistan (SECP), the outgoing president of the Islamabad Stock Exchange (ISE) here on Monday handed over the traditional key of the exchange to the newly-elected non-broker chairman, R.A. Chughtai.

ISE is the first of the three exchanges which accepted last week the SECP directive that a broker could no longer be elected as chairman of the exchanges, a directive that invited controversy after the Karachi Stock Exchange (KSE) refused to accept it.

On Monday, members of the ISE board were elected, with a non-broker as its chairman first time in the country’s history.

Adviser to the prime minister on finance Dr Salman Shah, who presided over the ceremony, termed the election of a non-member as chairman a historic event that would further encourage confidence of domestic and international investors.

“The step would further ensure that the international best practices are followed in Pakistan.” He said the demutualization of stock exchanges was something the way of the future and it was a tremendous progress that the ISE accepted this directive of the SECP.

“Be it Europe or East Asia, the exchanges all over the world were separated from the brokers and were the entities of their own rights with clean, transparent and efficient mechanism of operation.”

He said the integration of the ISE with the Lahore Stock Exchange (LSE) after the implementation of demutualization would further ensure that efficient services were provided to the investors.

In reply to a question regarding the opposition of the KSE to the SECP directive, Mr Shah said there could be some differences over the process of implementing the directive, but no one opposed the principle under which the directives about a non-broker chairman were issued by the SECP.

The newly-elected ISE chairman said he was proud of being the first non-broker chairman of an exchange in the history of Pakistan. He said in future, roadmap demutualization would be one of the main ways of proceeding forward.