Stock market trading, shares: SECP needs more monitoring of ‘expert opinion’ social media groups

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) requires more surveillance and monitoring of the social media groups like Whatsapp involved in giving expert opinion on stock market trading and shares.

Abdul Rehman Warraich, Commissioner Securities Market Division (SMD) SECP informed media on Tuesday that the SECP Headquarters that the area needs more surveillance. On social media, unauthorized persons are not allowed to give their opinion on buying and selling of shares to the general public.

In this regard, the SECP has developed an indigenous application for stock market surveillance/market data analysis of stocks traded at the exchange.

The market surveillance team of the SECP briefed media on Tuesday that a state of the art surveillance system has been procured from Shenzen Stock Exchange by the Pakistan Stock Exchange (PSX) which has the capability to generate smart and real-time alerts.

The SECP officials shared that the cases of “Insider trading” needs detailed investigation as well as evidence to prove in the court of law. It is a time consuming process even in foreign jurisdictions.

The SECP’s market surveillance team informed the participants about SECP’s mandate with respect to the market surveillance function. Participants were informed about different types of market abuse, such as insider trading, market manipulation, etc., and briefed about various modern tools for surveillance that have been deployed at SECP and PSX. Different triggers for the detection of market abuses, such as system-based alerts, referrals, complaints, etc., were explained to participants. Case studies were presented to participants to help them develop an understanding of market abuses, especially insider trading and market manipulation.

Participants were also told about various risk indicators, such as the index, liquidity, settlement-to-trade ratio, relative strength index, broker exposure, volume leaders in leverage, and those being overseen by the SECP. She also appraised participants on liquidity, leverage, volatility, holdings, redemptions, solvency risk, reinsurance, and investment risk.

In this regard, the SECP hosted a financial reporting workshop to elaborate on various factors and elements that can impact performance and cause volatility in the equities market. Senior journalists from print and electronic media attended the seminar.

Abdul Rehman Warraich, Commissioner Securities Market Division (SMD), defined the stock exchange as a place for capital formation, financial inclusion, channeling savings, and diversifying investments. Warraich gave detailed responses to queries on various functions of the stock exchange and explained the regulatory regime.

Musarat Jabeen, Executive Director and the Chief Spokesperson of SECP briefed them about various reforms initiated by the SECP to strengthen the capital and equity markets, especially the recent reform for safeguarding the interests of minority shareholders.

The participants were briefed on the trading, clearing, and settlement functions of the Pakistan Stock Exchange, the National Clearing Company, and the Central Depository Company of Pakistan Limited.

The SECP officials gave a detailed presentation on the digital online account opening process, the KYC framework, and the newly introduced Centralized Gateway Portal for retail investors across all asset classes, i.e., the securities market, asset management companies, and insurance companies. The new process required filling out one-time account opening forms, KYC, and CDD with standardized information and documents.

Copyright Business Recorder, 2024