Exchange rates soften


A new, revised and market-friendly transaction tax will be levied on all transactions on the PNG National Stock Exchange (PNGX).

Papua New Guinea Securities Commission (SCPNG) Executive Chairman Robert Minak announced.

“We have looked at the existing levy rate of 0.75% and believe that the amount of this levy is too high and will discourage investors and therefore market activity.

“After meaningful consultation with relevant industry stakeholders, we concluded that there was a need to significantly reduce the rate,” Minak said.

“Levies are offered as a way to increase government revenue.

But levies can harm the quality of the market by unnecessarily weighing on the economy by skewing the allocation of investors’ capital by reducing trade volumes, increasing volatility and negatively affecting price discovery ”.

Although we are required by law to keep a levy, its rate should reflect current market conditions in PNG, ”he added.

SCPNG is legally required by Section 44 (1) of the Securities Commission Act 2015 (SCA) to retain a direct debit and by Section 429 (a) of the Capital Market Act 2015 (CMA) to remit part of it to the capital market development. Funds.

The legislative path envisaged by the combined effect of these provisions is therefore that part of the levies will ultimately be returned to the Capital Market Development Fund.

SCPNG agrees that the objective of any levy collected under Section 44 (1) of the SCA should be used for market development rather than a source of government revenue.

The levies should be used for market development through the Capital Market Development Fund (CMDF).

SCPNG recognizes that all withdrawals are earmarked for capital market development purposes for the time being so that the market has every chance to develop.

Based on the review, the Securities Commission introduced substantial governance oversight and transparency on levy setting mechanisms, levy review mechanisms and proposed levy spending.

The governance infrastructure and administrative system will emerge in the coming months.

They may include reports to industry on actual expenses and reimbursement of unspent levies.

This new revised rate will take effect two months from the publication date of the newspaper.

However, any previous levy collected by a stockbroker or participating organization based on the now revoked rate (0.75%) must be returned to buyers or sellers within 14 days.

“The revised rate is a significant drop (96%) from the rates currently in effect.

“The SCPNG hopes that these changes will allay stakeholder concerns, maintain the quality of the market and help restore confidence in the market in general,” said Minak.

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