Regulator prefers extraction over regulation and transparency.
Tariq Khattak
ISLAMABAD (Dec 04)
The Securities and Exchange Commission of Pakistan (SECP) compelled market institutions under its oversight to finance an international conference in November, raising concerns about regulatory independence and influence on the market participants amid scrutiny over unauthorised salary increases exceeding 267 million rupees annually and an illegal payment of seven million rupees to a commissioner who is close to an influential federal secretary.
Sources confirmed that the SECP asked the Pakistan Stock Exchange, the National Clearing Company, the Central Depository Company, the Pakistan Mercantile Exchange, and a brokerage house to fund a capital markets conference. Each institution was pressed to contribute four million rupees, covering an estimated 20 million rupee bill for a five-star venue, hotel bookings, foreign guest accommodation, and travel for more than two dozen SECP officers from Islamabad.
Some private entities initially resisted the funding, citing budget constraints, but SECP exerted its influence to secure the funds. Businessmen revealed that this is not the first time the SECP has pressured regulated entities to fund events. One official said SECP’s repeated urging raises concerns about its independence and motives, which is vital for public trust and policymaker confidence.
A recent audit report flagged SECP for withholding nearly 14 billion rupees from the Federal Consolidated Fund, in violation of the Public Finance Management Act, raising serious questions about financial irregularities, oversight failures, and the potential for misappropriation of public funds. SECP’s multiple fee hikes in 2024, including a 400 percent increase for electronic company registration and a 350 percent rise for manual filings, could undermine trust and highlight the need for transparent governance amid ongoing irregularities.
The Prime Minister and Finance Minister ordered investigations into the audit findings. They instructed the immediate withdrawal of all perks and benefits from the SECP chairman and commissioners until further notice. The Senate Standing Committee on Finance moved to revoke the authority of the SECP and State Bank of Pakistan boards to set executive salaries, recommending amendments to both acts that require cabinet approval for pay increases; however, no action has been taken so far. The SECP refused to present their view of the allegations, further complicating oversight efforts.
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