Misleading opinions inducing masses for stock trading: SECP

The Securities and Exchange Commission of Pakistan (SECP) has observed that recently certain incidences and statements have been reported in the print/electronic/social media influencing sentiments about the stock market. These reports have been issued by people who are neither qualified nor possess the requisite expertise/skill to furnish such opinions. The research analysts are the only qualified experts who can furnish opinions about the capital markets. The spreading of misleading views tantamount to inducing public, based on deceptive, unfounded or inappropriately disclosed information is prohibited in terms of Securities Act, 2015, the framework governing stock market trading.

While SECP encourages conducive regulatory environment for sustainable growth of capital markets, it is also responsible for maintaining the integrity and efficiency of stock market. SECP closely monitors the market activities on regular basis. As a result of SECP vigilance, several criminal complaints have been filed against the individuals/entities who were involved in market abuses. Moreover, SECP has also issued prohibitory orders in case of few individuals and leading institutional investors to curb malpractices. A limited scope thematic review of certain brokerage houses is also on the anvil to check their compliance status with regulatory frame governing permissible mode of financing stock investments.

Considering the legal framework, all persons including the market experts are advised to be careful while giving any opinion through print/ electronic/ social media as the same may affect securities trading decision of general public/investors. In future, dissemination of any misleading/distorted news/statement may attract the punitive action in terms of Securities Act, 2015. SECP would implement zero tolerance policy while protecting the interest of investors/general public. Furthermore, it has also been observed that some listed companies are not promptly responding to news appearing in media that may affect the opinion of investors. To address this issue, SECP has issued necessary directions to PSX.

SECP expects media to play its due role to ensure dissemination of only credible information to the general public.-PR