Hike in salaries: Senate body seeks an end to powers of regulatory bodies’ boards
ISLAMABAD: The Senate Standing Committee on Finance and Revenue on Thursday recommended the Finance Division to submit amendments for withdrawal of powers of regulatory bodies to increase their salaries through policy boards.
The committee recommended that the federal government should have power to increase salary and not the Policy Boards of the Regulatory Bodies. Out of 18 regulatory bodies, exception should not be given to three regulatory bodies.
The state-owned enterprises have the same powers to raise their salaries, official of the Ministry of Finance stated.
Reviewing the audit objections in the Securities and Exchange Commission of Pakistan (SECP) worth Rs 267 million, as highlighted in the Auditor General of Pakistan (AGP) report, the Chairman SECP Akif Saeed stated that the same sort of issues was raised in previous years, which were later settled after a comprehensive response from SECP.
However, the committee raised eyebrows over the powers of “Regulatory Bodies” to increase their salaries. It was revealed that three Regulatory Bodies i.e. SECP, State Bank of Pakistan and Pakistan Medical and Dental Council (PMDC) have the power to increase their salaries among all the existing bodies. The committee called for rationalisation of such powers and stated that the power to increase salaries should reside only with the Cabinet and the prime minister. The committee recommended that the Finance Division submit amendments within one month for rationalisation of such powers vested in Regulatory Bodies.
The SECP chairman informed the committee that under the SECP Act, the Commission shall be administratively, financially and functionally independent and the Federal Government shall use its best efforts to promote, enhance and maintain independence of the Commission.
In view of the above provisions of SECP Act 1997, it is clear that determination of remuneration of SECP’s employees as well as its commissioners and chairman is prerogative of the Securities & Exchange Policy Board, which is constituted by the federal government under Section 12 of the SECP Act 1997. The Policy Board comprises of five ex-officio members i.e. secretaries of Finance, Commerce & Law Divisions, deputy governor State Bank of Pakistan (SBP), chairman SECP and six members from the private sector.
It is pertinent to mention here that such observation about non-approval of pay packages by the federal government has not been raised by AGPR for the first time. In the past, SECP has consistently held that, approval of the pay packages of its employees and commissioners including chairman is the sole prerogative of the Policy Board and the general government instructions are not applicable to the SECP in the presence of a special law of the Parliament i.e. SECP Act 1997, SECP chairman added.
Pay package of chairman and commissioners (as well as employees) were revised by the Policy Board (as per law) after an independent compensation survey conducted by KPMG. The salaries of chairman and commissioners proposed to be revised at a much higher rate, but Policy Board decided to increase the salary reasonably, keeping in view that these are privileged positions. It is important to note that CEOs of banks, DFIs, and corporates are getting much higher salaries than the chairman SECP. If the power to fix the salaries of chairman and commissioners is given to the federal government then the independence of the Commission in financial, administrative and functional matters will be compromised which is guaranteed in Section 3 of the SECP Act, 1997. Further, SECP will be unable to attract & retain professionals.
Chairman of the Finance Committee Senator Saleem Mandviwalla, repeatedly said that the committee has no issue on the amount of increase in salary of the SECP chairman, but the issue is related to the powers of regulatory bodies to raise their salaries.
Senator Farooq Naek questioned whether the judges of the Supreme Court of Pakistan and High Courts have powers to increase their salaries on their own?
Secretary Ministry of Law responded that the salaried are increased by the President on the advice of the prime minister.
In attendance were Anusha Rahman Ahmad Khan, Farooq Hamid Naek, Ahmed Khan, Muhammad Abdul Qadir, Dilawar Khan, AfnanUllah Khan, Additional Secretary for Finance and Revenue Amjad Mahmood, Chairman FBR Rashid Mahmood Langrial, Chairman FBR Akif Saeed, Chairman CCP Dr Kabir Ahmed Sidhu and senior officials of relevant departments.
Copyright Business Recorder, 2025