Corrective action needed at SECP

Former Chairman SECP Razi-ur-Rehman calls it the official murder. Another former SECP boss Khalid Mirza says, "From the draft that I have seen, the original concept of an independent collegiate body with a separate guiding institution, i.e. a policy board, is no longer there".
In both cases the expression may be different but the theme is the same: don clip SECPs powers.
And they have all the right reasons to do so; the proposed changes to SECP Act will not only corrode its independence, but will also "make it susceptible to undue influence and to possible abuse" according to Mutual Fund Association of Pakistan.
Moreover, converting SECP into an arm of Finance Ministry will make the Secretary Finance the real boss and make SECP into the long-defunct Corporate Law Authority once again.
Regulatory bodies are established to make market economy function more efficiently.
Giving financial and administrative autonomy, levying fees and fixing tenure of appointment respectively, enables the regulator to equate the government with private businesses on an equal footing. This helps bring rationality and clarity in rules and regulations governing the business agents.
The other financial regulator, SBP enjoys the autonomy through the SBP Act. The banking companies ordinance gives SBP the legal power to effectively protect the interest of depositors, who have around 90 percent stake in banks, and protect their lifelong savings.
SECP needs to protect the right of minority shareholders in listed companies and regulate the bourses for protection of investing public. It does not mean the rights of majority are diluted. However, SECP has to monitor the misuse by managing agents of businesses who may abuse their positions for personal gains.
Unlike the central bank, SECP has lately failed to meet the expectations of the general investing public, as the institution has been on the downslide for the last couple of years.
Now with only two commissioners, as against the need of at least five (and the sanctioned strength of seven), SECP has lost its effectiveness.
The need of the hour is to put the right man of requisite strength at the helm of SECP and place the policy making board back under the chairmanship of SECP chairman with Secretary Finance as a board member.