Action against stock brokers SECP to brief Senate body

The Securities and Exchange Commission of Pakistan (SECP) will brief the Senate Standing Committee on Finance and Revenue about the ongoing action against stock brokers and issues in stock market. Chairman SECP Zafar Hijazi informed media here on Tuesday that Chairman Senate Committee for Finance and Revenue, Senator Saleem Mandviwalla, has heard one side of the story. "We will inform him about the facts and data about the ongoing issues in the stock market. We are confident that the committee will give its verdict in favour of the SECP," he added.
Zafar Hijazi was confident that the committee would duly hear the viewpoint of the SECP and its appropriate actions in the stock market to protect small investors. Responding to different queries on Mandviwalla's statements against the SECP, he said that the media should not try to create differences between the SECP and legislators.
The SECP chairman lauded Senator Saleem Mandviwalla for taking interest in the ongoing issues of capital market and termed it a good gesture of the legislative body. Hijazi said that the SECP team will appear before the Senate committee to explain the realistic situation and its point of view. Hijazi was very optimistic that the Senator Mandviwalla will appreciate the regulator's efforts for bringing transparency in the market. On the same issue, Chairman Pakistan Stock Exchange (PSX) Munir Kamal acknowledged that the legislators like Mandviwalla have raised issues of brokerage houses. It is a good thing that the legislators have raised the issue of capital market. The credit goes to the legislators that they are taking interest in the issues of capital market, he added.
Earlier, Chairman Senate Standing Committee on Finance and Revenue Senator Saleem Mandviwalla has lambasted unfair intervention of the Securities and Exchange Commission of Pakistan (SECP) in the Pakistan Stock Exchange (PSX).
In a statement, Mandviwalla said, "Whoever stock brokers are doing wrong should be penalised and action should be taken against them but the market intervention by SECP will not be tolerated." He said that "single member companies are banned to obtain brokerage house licence but this is a real failure on the SECP part that it is unable to do a thorough study and is letting single member companies to become a member at the PSX."
Mandviwalla said that SECP chairman has asked to form broker association across the country but he does not know that it already exists, Yaseen Lakhani is its chairman and it is called the PSX Brokers Association.Senator Mandviwalla said that "SECP intervention can damage the stock exchange performance and also scare foreign investors." It should stop pressurising brokers to clear their stock.
He criticised the recent move of Securities and Exchange Commission of Pakistan (SECP) against the stock brokers of Pakistan Stock Exchange (PSX). Mandviwalla said, "The SECP is threatening use of NAB and harassing the legitimate stock brokers because of some so-called brokers who were successful in dumping the unassuming clients."
Mandviwalla said, "The threat of NAB will scare the legitimate brokers and the number of inquiries done by SECP is creating unnecessary uneasiness among brokers. Reputable brokerage houses have also shut their businesses because the amount of compliance is becoming costly. Even if something is found to be non-compliant, time should be given to fix those non-compliances." The current dilemma of the market where all brokers were told to clear debits and stop charging their clients mark-up on over draft would have been extremely uneasy, he added.
Mandviwalla said, "There is a desperate need of a viable long-term leverage product which once implemented should not be altered to the benefit of a few brokers. Once a new product been implemented first and then brokers were given time to move to the new product as opposed to first cleaning the debits and then waiting for the new product to come." This has caused major hindrances in business and is also one of the reasons for the current volatility in the market, Mandviwalla added. He said, "All check and balance, rules and regulations are already in the PSX but SECP itself has violated these rules and had been unable to implement them. There is very little help from SECP on regulations they barely give clarifications and are mostly reactive about policies."