SECP issues guidelines for cooperation with foreign regulatory authorities

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP), on Wednesday, has issued guidelines for cooperation and assistance to foreign regulatory authorities, under which the SECP has said that it is ready to exchange the data, including financial information of companies with financial services regulatory bodies under the framework for international cooperation and multilateral information sharing arrangements.

These guidelines for cooperation and assistance to foreign regulatory authorities provide a framework for international cooperation under section 42D and to stipulate formal mechanisms for sharing information and assistance under the Act or any administered legislation.

It said the SECP can provide assistance not only in investigations but also in other types of inquiry as part of a compliance programme for preventing illicit activities.

It can also exchange general information about matters of regulatory concern, including financial and other supervisory information, technical expertise, surveillance and enforcement techniques, and investor education.

The form of assistance may include obtaining public or non-public information.

The SECP said that strong international cooperation is important to facilitate the detection and deterrence of cross-border misconduct and to assist in the discharge of licensing and supervisory responsibilities.

The commission recognises the importance of international cooperation and assistance among jurisdictions for effective and appropriate resolution of cross-border regulatory and enforcement issues to protect investors and policyholders, and combat cross-border violations of laws.

Hence, in 2016, a new independent section, 42D, regarding international cooperation and assistance to foreign regulatory authority was inserted in the Act through SECP (Amendment) Act, 2016 to address the concerns and needs of the SECP on international cooperation and assistance.

The section authorises the commission to seek and provide assistance, on a reciprocal basis to international regulators for assisting in any inquiry or investigation for contravention of laws relating to financial services, the SECP said.

The law authorises the commission to require the production of any information or document from any person on the request of the requesting authority.

The SECP has the ability to provide non-public information or document filed with or provided to the Commission, or obtained by the Commission from any person, to the foreign regulatory authorities upon request.

The SECP, when requesting such non-public information from any foreign regulatory authority, shall establish and maintain safeguards necessary and appropriate to protect the confidentiality of information and documents and provide assurances of confidentiality to the foreign regulatory authority, including assurances that the SECP will use these documents for the reasons specified in the request.

The SECP will make no public use of the information without prior approval of the foreign regulatory authority; it will notify the foreign regulatory authority of any legally enforceable demand for the information prior to complying with the demand, and assert such legal exemptions or privileges on the foreign regulatory authority’s behalf as it may request.

All requests received from multilateral or bilateral forums/regulators/organizations must be made in accordance with the terms and conditions as specified in the information sharing agreement (MMoU/MoU). Such MoUs, including the IOSCO MMoU, outline how requests for assistance should be made.