The Securities and Exchange Commission of Pakistan (SECP) continues centralized supervision over capital markets and regulated businesses.
Recently, a meeting of the Commission engaged in a serious critical review of the ongoing supervisory activities with respect to regulated businesses. Such review included pooled investment-related businesses, among others, mutual fund businesses, insurance companies, and brokerage businesses. Discussions also ensued on how best investors could be protected from illegal deposit-taking and investment schemes.
The Commission highlighted its adherence to Standard Operating Procedures regarding the pending court cases. Currently, 53 investigations and 30 criminal complaints filed by the Commission are under stay order from relevant courts.
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The Commission appreciated the recent review of the mutual fund industry, which aimed at protecting investors’ interests. The Commission’s approach to adopting international best practices is a strong supervisory model for pooled investment vehicles through technology and modern techniques, which can give early warning signals for timely remedial measures.
Aware of the insurance business’s importance and public interest, SECP remains vigilant in business conduct and identifies at-risk players to restore public confidence in policyholders. The commission stated that Rs. 162 million extra was refunded to the policyholders because of insurance companies’ regulatory intervention.
The whole risk-based onsite inspection conducted on sixty-four securities brokers, all brokers in Islamabad and Lahore, has ended. The inspection covered areas such as segregation of clients’ assets, margin collection, margin financing, and pledged securities to prevent possible non-compliance or malpractice in 64 securities brokers. The Joint Inspection Team consisted of the Pakistan Stock Exchange, Central Depository Company, and National Clearing Company in conducting the risk-based onsite inspection. Inspection findings failed to hint at an imminent risk with respect to the brokerage activities.
The compliance ratio of public sector companies (PSCs) to file their financial statements increased from 34% to 51% through follow-up.
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Apart from monitoring regulated activities, SECP took the authorizer action to address illegal deposit-taking, fraudulent investment schemes, and illegal digital lending apps. In this connection, 142 illegal lending apps were blocked and referred to Google, FIA, PTA, and SBP.
Over fifty entities were identified with illegal deposit-taking and investment schemes. All the prescribed measures were taken such as, but not limited to, issuing warnings to the public, notifying on the Commission’s website, informing NAB/SBP/FIA, blocking URLs through PTA, flagging sponsors/directors, and proceeding for company closures. This was also complemented by signing an MOU with FIA to safeguard the public from illegal activities.