Plans to lower levies on PNGX

A LOWER levy will be charged on all transactions on the PNG National Stock Exchange (PNGX), acting executive chairman of Securities Commission of PNG (SCPNG) Robert Minak says.
Minak said they had reviewed the existing levy of 0.75 per cent and lowered it to 0.03 per cent.
A levy on Securities Transactions Order was made on Feb 10 under Gazettal No.G79 which took effect on March 8.
“The rate of the levy payable by a purchaser or seller for sale and purchase of securities recorded on a stock exchange was set at 0.75 per cent of the purchase or sale price of securities,” Minak said.
“Since the order outlining the levy was released, investors and financial service sector stakeholders, including the PNGX raised concern about the size, its timing and manner of introduction.
“Levies are proposed as a way to raise government revenue.
“But levies can harm market quality by unnecessarily burdening the economy by distorting investors’ capital allocation in reducing trade volumes, increasing volatility and adversely affecting price discovery.
“While we are required by law to retain a levy, its rate needs to reflect PNG’s current market condition.”
Minak said SCPNG is a statutorily obliged by section 441 (1) of the Securities Commission Act 2015 (SCA) to retain a levy and by section 429 (a) of the Capital Market Act 2015 (CMA) to remit a portion of it to the Capital Market Development Fund.
He further said SCPNG retained the levy but revised and eased its quantum down to a market-friendly rate of 0.03 per cent of the sale or purchase price per transaction.
Minak said the new revised rate will take effect two months from date of the publication of the gazettal.
Any previous levies collected by a stockbroker or participating organisation based on the now revoked rate (0.75 per cent) needed to be returned to purchasers or sellers within 14 days.