A meeting was held Tuesday between the board of directors of Pakistan Stock Exchange Limited (PSX) and a full bench of the Securities and Exchange Commission of Pakistan (SECP) wherein the matter of recent broker default at PSX was discussed in detail.
According to a press release, the PSX board shared the findings and recommendations of an internal inquiry into the recent broker default and the role of the Chief Regulatory Officer (CRO) of the Exchange in the timely detection and reporting of the same. The Board has decided to suspend the CRO pending a detailed enquiry.
During the meeting, the Chairman SECP emphasised the need for implementing reforms for investor protection in a forceful and timely manner, and in particular advised the Chairman PSX Board to ensure that there is no compromise on this aspect. During the meeting, a number of measures were discussed which were directed for implementation by the Commission in its previous meeting with the PSX board held on February 8, 2016. In order to strengthen the Exchange's capacity as a frontline regulator PSX agreed to put in place a stronger inspection regime for brokers, and on the need to establish a national level Brokers' Association as a Self-Regulatory Organisation under the Securities and Exchange Commission of Pakistan Act, 1997. In line with international best practices, the mandate of such association should inter alia include formulating necessary code of ethics for its members and instituting disciplinary policies/procedures for non-compliances of relevant regulatory framework.-PR
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