Securities and Exchange Commission (SECP) Chairman Zafar Hijazi said on Tuesday the commission would use the full force of law against stockbrokers who have absconded with cash and securities of their clients.
The commission held a lengthy meeting to review the situation arising out of sudden closure of business by a Lahore-based stockbroker, MR Securities. This brokerage house was the subject of a recent inspection by the SECP Surveillance, Supervision, and Enforcement Department.
The SECP chairman ordered a complete review of the current system that allows all stockbrokers to hold custody of clients’ shares and cash. The SECP team would be taking all possible remedial measures to protect investors and any broker found negligent in ensuring safe custody of client assets and records shall be subject to strict action.
The SECP inspection team demanded back office data from MR Securities, following which its owner, Mazhar Rafique disappeared without providing the record. When the SECP’s inspection team highlighted this fact, the commission immediately sent a team of officials to Lahore on Monday night to seize all back office records from the brokerage house.