KARACHI: The removal of Zafar Hijazi as Chairman, Securities Exchange Commission of Pakistan (SECP) has paid dividends for the Pakistan Stock exchange, due to less firmness exhibited by the corporate regulator.
Under the acting chairmanship of Zafar Abdullah, the SECP has tried to uncouple regulations which were deemed detrimental to the cause of PSX and satisfy market investors, which would assist in raising the level of KSE-100 index again.
Mr. Abdullah served the SECP as Executive Director in the Securities Market Division, Karachi Stock Exchange as Chief of Operations, Central Depository Company as Head of Operations, Dewan Mushtaq Group as Chief Compliance Officer/Company Secretary and Crosby Securities Pakistan Limited as Chief Executive Officer. His last assignment was as Company Secretary and Head of Legal Division with Faysal Bank Limited. He joined the SECP as a Commissioner in August 2017.
Brokers, who have a major influence in the dynamics of Pakistan Stock Exchange (PSX) have appreciated the steps undertaken by SECP to soften regulations and believe it has helped revitalize trading activity and provided availability of more financing to investors.
A PSX official chided current reversals of previous regulations and changes framed were done without stakeholder input.
The corporate regulator has reversed a series of regulations recently, which includes withdrawal of mutual funds for maintaining at least 5 percent of assets under management in cash and now they can invest 100 percent cash.
In a comment to a local newspaper, ex-director of PSX board and broker Zafar Moti said under Hijazi the regulations had been overkilled and the recent revision/changes in rules by acting SECP Chairman were widely welcomed.
Moti added, the softening of regulations could be linked to influence that has been exerted by the Chinese consortium which bought a 40 percent controlling stake in PSX.
He said, “The market would have dropped further below 38,000 points had the SECP not done away with over-regulations.”
According to the PSX official, SECP should have setup a committee for formulating rules for the stock market and undertaken fruitful meetings with stakeholders, discussed and recommended regulations, which never transpired.
He added regulation suggestions should be the domain of PSX and currently rules were being enforced by individuals via recommendations of a few brokers and being executed through directives.
