ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has conducted onsite inspections/investigations of 105 stock market brokers and issued warnings to 35 brokerage companies during 2020-21.
The SECP data revealed that onsite supervision is the key tool to monitor the activities of brokers to ensure regulatory compliance. Inspection and investigation of the brokers are conducted regularly on the basis of indicators of risk assessment criteria inclusive of financial strength, compliance level, and business performance. A significant number of inspections/investigations were conducted during the year leading to compliance directives or referrals for adjudication depending upon the nature of regulatory non-compliance.
The SECP report revealed that the offsite review of financial statements and other statutory returns is the primary tool for supervision of the corporate sector.
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Onsite inspections or investigations are conducted if necessitated by the offsite review, on the basis of recommendation of the Registrar or a complaint by an eligible shareholder.
Major non-compliances or irregularities observed during the offsite or onsite reviews are referred for adjudication while warning/compliance directives are issued for minor non-compliances by the respective supervision functions.
Moving ahead, in the forthcoming year, Commission foresees thorough and well-synced enforcement supported by offsite supervision, onsite inspections, investigations and adjudication functions.
Priority areas continue to aim at transparent disclosure, informed decision making, accountability, and protecting minority shareholders and the general public. The AML/CFT-related compliance shall remain a key focus.
Copyright Business Recorder, 2022