The World Bank Report No: ISR8425 Implementation Status & Results Pakistan Capacity Building of Institute of Capital Markets (ICM) (P125968) Public Disclosure Copy Operation Name: Capacity Building of Institute of Capital Markets (ICM) Project Stage: Implementation Seq.No: 2 Status: ARCHIVED Archive Date: 28-Apr-2013 (P125968) Country: Pakistan Approval FY: 2011 Product Line: Institutional Development Fund Region: SOUTH ASIA Lending Instrument: Implementing Agency(ies): Institute of Capital Markets Key Dates Board Approval Date 29-Mar-2011 Original Closing Date 09-Jun-2014 Planned Mid Term Review Date Last Archived ISR Date 10-Apr-2012 Effectiveness Date 27-Oct-2011 Revised Closing Date 09-Jun-2014 Actual Mid Term Review Date Project Development Objectives Project Development Objective (from IDF Proposal) The recipient of this grant is the Government of Pakistan and the implementing agency is the Karachi-based Institute of Capital Markets (ICM). The main purpose of the grant is to develop the capacity of ICM to enable it to promote knowledge and to introduce professional standards in Pakistan’s financial sector and markets. The main objectives include: enabling ICM to improve public awareness of its program through conferences; strengthening the institute’s program offerings through quality assurance and development of new programs and curriculum; and establishment of a resource center including a library and database within ICM. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost ICM's evaluation for international accreditation and development of a resource center 126500.00 Improvement in ongoing programs and introducing courses for capital market professionals 253500.00 Public Disclosure Copy Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Moderate Implementation Status Overview The Institutional Development Fund (IDF) Grant for the capacity building of the Institute of Capital Markets (ICM) was approved on March 29, 2011, it became effective on October Page 1 of 4 The World Bank Report No: ISR8425 27, 2011 after the Subsidiary Grant Agreement was signed by the Economic Affairs Division (EAD) – the recipient, and ICM – the implementing agency. The Grant is scheduled to close on June 9, 2014. The amount for this Grant is US$380,000 of which US$212,987 have been disbursed which is 56 percent of the total amount. Public Disclosure Copy ICM was established under the auspices of the Securities and Exchange Commission of Pakistan (SECP) in 2009 and functions independently through its own Board and a management team. Its mandate is to introduce recognized and high level certification services to the operators in the capital markets including stock exchanges, mutual funds, leasing companies, and brokerage houses. The management of ICM has undergone a complete change with the new CEO taking charge in March 2012, and with the appointment of the Chief Financing Officer (CFO) in September 2012. This has strengthened institution's team and technical expertise, and has also enabled ICM to become demand driven. There is frequent interaction with the market players, while the institutional capacities have also been strengthened through on-the-job training of the junior staff. Given the recent changes within the ICM, and also the evolving priorities of the players in the capital markets of the country, SECP and ICM held discussions with the Bank team during September and October 2012 to propose adjustments in the Grant allocations. Through this restructuring, only the changes in the allocation of Grant amounts between the categories are proposed. This will allow ICM to focus more on the development of new curriculum and certification programs (list attached as Annex 1), and shift the focus from internal training programs to developing the skills base and services for the external clients in the capital markets. The discussions of ICM team with Bank were followed by a formal request from EAD for a Level 2 restructuring through letter dated November 29, 2012. At that time, there were financial management (FM) requirements pending with ICM including submission of the audited financial statements and also the Interim Financial Reports (IFRs). These documents were submitted to the Bank during January 2013 following which the Bank team discussed the proposed restructuring plan with the management of ICM in Karachi on January 31, 2013. Subsequently, the Grant's Level 2 restructuring was approved by the Country Director on March 5, 2013 to help ICM reach its intended target beneficiaries by developing additional courses for the practitioners in the capital markets. The notice of reallocation of Grant proceeds was conveyed to EAD vide Bank letter dated March 12, 2013. Locations Country First Administrative Division Location Planned Actual Pakistan Sindh Karachi ✔ Results Indicators Public Disclosure Copy Page 2 of 4 The World Bank Report No: ISR8425 Indicator Name Core Unit of Measure Baseline Current End Target Evaluation of ICM Programs and its readiness Text Value Limited accreditation of The internal assessment 1. Process in place to for seeking accreditation capital market professional report of ICM has been evaluate ICM programs by Public Disclosure Copy players in Pakistan drafted and will be finalized by international accrediting end May 2013. Following that, bodies. the institution will reach out to 2. Initial certification programs international bodies exploring of ICM are evaluated and possibilities of accreditation. upgraded to internationals standards for accreditation. Date 15-Jun-2011 31-Jan-2013 31-Dec-2012 Comments Research and information access to members Text Value Research and resource gap in The ICM has now fully Access to research and of ICM the market impeding equipped its resource center publication for ICM members knowledge sharing and with relevant material and and up gradation of their skills upgrading of skills in existing published handbooks for the through training. professionals professionals across Capital Markets. More publications and handbooks will be disseminated during the last quarter of FY13. Date 15-Jun-2011 31-Jan-2013 30-Apr-2013 Comments Capacity gap between market needs and Text Value Significant gap between No progress as the activities 1. Registration of at least 400 existing professionals reduced market demands and existing supporting this indicator are market professionals in capacities not due to start yet. various ICM certification programs 2. Examinations conducted and certification awarded to at least 300 market professionals after examinations Date 15-Jun-2011 31-Jan-2013 31-Dec-2013 Public Disclosure Copy Comments Data on Financial Performance (as of 01-Mar-2013) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P125968 TF-99866 Effective 09-Jun-2011 09-Jun-2011 27-Oct-2011 09-Jun-2014 09-Jun-2014 Disbursements Page 3 of 4 The World Bank Report No: ISR8425 Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P125968 TF-99866 Effective USD 0.38 0.38 0.00 0.21 0.17 56.00 Public Disclosure Copy Disbursement Graph Key Decisions Regarding Implementation The IDF Grant for ICM was restructured during March 2013 and notified on March 12, 2013. ICM is now gearing to spend the Grant proceeds on the development of additional courses for the financial advisors, asset management companies, stock exchanges and clearing companies. In order for ICM to successfully complete the activities by June 2014, the management of the institution will have to continue providing oversight in order to ensure that the activities are completed within their intended time-frame. Restructuring History There has been no restructuring to date. Public Disclosure Copy Related Projects There are no related projects. Page 4 of 4