ISLAMABAD: The parliamentary panel on Thursday directed the Security Exchange Commission of Pakistan (SECP) to review policy for stock brokers and brokerage houses in consultation with all stakeholders and submit its report to the committee in 15 days.
The directive came at a meeting of the National Assembly’s Standing Committee on Finance, Revenue and Economic Affairs held under the chairmanship of MNA Faiz Ullah.
The committee discussed the new policy regime introduced by SECP regarding stock brokers and brokerage houses.
The SECP commissioner briefed the committee about the salient features of new policy, wherein he explained the measures taken for the improvement of stock market by the government.
He said the new regime would be based on categorization of brokers into three categories such as Trading & Clearing (T&C), Trading & Self-Clearing (TSC) and Trading Only (TO).
The SECP chairman informed the panel that proper consultation in this regard had already been made by the commission with a number of stakeholders (stock brokers) in the last 10 months.
He also explained the objectives of new regime, increase in number of brokers, improvement of governance and internal controls, compliance with AML/CFT requirements, ease-of-doing-business and commercial viability of brokers.
On the other hand, Pakistan Stock Exchange’s Broker House Karachi President and few other stakeholders expressed their concerns over the design of the new regime.
They were of the view that the said SRO (new regime) would affect small stock exchange brokers and would further create monopoly of leading brokers.
Some members of the committee were of the view that subject regulations would provide protection to investors.
The committee members also showed concern over the proposed policy, saying it had been prepared in haste.
A member of committee Ayesha Ghous Pasha said the SECP should consult with the relevant stakeholders.
Another committee member retired captain Jamil Ahmad revealed that the investors had lost Rs8 billion in the last 20 years while the successive governments had not given relief to investors. “The new policy is the need of hour,” he added.
SECP’s Policy Board Chairman Khalid Mirza said the department hadn’t consulted with the board on this proposed regime. “The neighbouring country has also prepared this type of law and it has succeeded. Now India’s stock market is a hundred percent bigger than the Pakistani market.”
He said that although it’s not binding with the SECP to discuss this matter with the board, but there were some loopholes in this proposed law.
This law would end the brokerage system in Pakistan which was already confined in big hands, Mirza added.
Concluding the matter, the NA committee’s chairman directed the SECP to review stock brokers and brokerage houses policy with the consultations of all stakeholders and submit its report to the committee in 15 days.
Committee member Hina Rabbani Khar questioned the FBR chairman’s absence at this crucial time when the International Monetary Fund (IMF)’s team was in Pakistan for review.
“We should know where he is,” Khar asked upon which the committee’s chairman replied that he (the chairman) was on leave and we are hopeful that he would assume his office.
The committee also showed concerns over the non-establishment of Zarri Taraqiati Bank Limited (ZTBL)’s Board, recommending its establishment immediately.
Earlier, the committee decided to defer agenda pertaining to budgetary proposals of the Ministry of Finance, Revenue and Economic Affairs relating to Public Sector Development Program (PSDP) for the financial year 2020-21, as required under rule 201(6) of the Rules of Procedure and Conduct of Business in the National Assembly 2007, due to time shortage.