The Securities and Exchange Commission of Pakistan (SECP) here on Thursday informed the retail investors of twin cities of Rawalpindi and Islamabad that the 'investor' education programme' would create awareness among investors on their rights and responsibilities and to understand and manage risk and reduce their vulnerability to fraudulent schemes in the market.
In a presentation on the investor' education programme, Salman Hayat, SECP Management Executive, briefed the participants about the investor education programme initiated collectively by stock exchanges and SECP. Islamabad Stock Exchange (ISE) held a seminar on investor education and awareness programme on Thursday at International Islamic University (IIU), Islamabad in collaboration with SECP.
Salman Hayat informed that the 'investor' education programme' would empower investors in evaluating different financial products and making informed decisions. It would expand outreach of financial services and products for more participation in the markets, and to create a balance in reliance on the banking sector and non-banking sectors. It would also remove mistrust on the financial sector in Pakistan and build investor confidence.
The programme will focus on different segments of the population with specific initiatives addressing each segment, taking in to account their needs, experience and accessibility. The investors will be segmented into three different bands: The first category - School & University Students - aim at developing life-long saving and investing habits at an early age. The second category is the general investors which will target the corporate sector and business community from various professions with a view to educate potential and existing investors on their rights, responsibilities, risks and rewards, analysis associated with investment in the capital market, retirement planning and highlight the legal infrastructure related with investments. The third category covers Grey Individuals which would focus on individuals close to the retirement age with a life long of savings, he added.
The programme is initially structured over three years with realistic but achievable targets. On completion of each year an evaluation of the programme will be undertaken to identify any shortcomings and build on the positives for future years. The evaluation methods would include feedback surveys; financial literacy tests; achievement of targets; increase in participation in the capital markets, Salman Hayat added.
ISE Deputy General Manager Waris Niazi gave a detailed presentation on investments, structure of financial system, role of stock exchanges, CDC and NCCPL, and over all procedures of investments. He detailed the financial products available in the market for existing as well as potential investors.
Responding to various queries of investors, Waris Niazi informed the business and trade about the difference between the existing structure and de-mutualised stock exchanges etc. When asked about any complaint handling system, expert from the ISE said SECP had developed an online complaint handling system for various categories of complaints received with status updates provided to investors.
Waris Niazi further explained the investors that the complaints against insurance companies were made to the Insurance Ombudsman. Before making a complaint, complainants are required to intimate in writing to the concerned insurance company their intention of filing a complaint. "If the insurance company fails to respond or makes an unsatisfactory reply within a period of one month, a complainant may file a complaint to the ombudsman within a period of three months. The complaint shall be made on solemn affirmation or oath. It must set out the particulars of the matter and the details of the complainant. The copy of the notice sent to the insurance company along with postal / courier receipt needs to be attached. Three complete sets of the complaint are required to be filed with the ombudsman," he added.
ISE Deputy GM further stated that there were certain malpractices against which a client could lodge a complaint such as unauthorised trading (sale/purchase); unauthorised transfer/movement of shares; non-supply of statements of account; non-supply of trade confirmations within 24 hours; overcharged commission; failure to execute investors' instructions/orders and suspension of payment and non-delivery of Securities.
To different queries, Waris Niazi stated that the arbitration was an alternative dispute resolution mechanism provided by Exchanges for those individuals that did not wish to go to the Court. "Through this method, disputes between the trading members and their constituents (ie clients of trading members) may be addressed and resolved in respect of trades made on the Exchange. The process of arbitration is comparatively faster than litigation. An application for arbitration has to be filed within three months from the date of the dispute. The stock exchanges will do arbitration under the arbitration regulations," he added.
During the question and answer session, ISE MD Mian Ayyaz Afzal apprised the investors that to keep their savings in their own hand, it was necessary that the investors open their own CDC accounts with the CDC. He spoke on investor's protection and necessity of investors to be aware of their rights and responsibilities.
Dr Bashir Khan, Dean Faculty of Management Sciences, appreciated the efforts of ISE and SECP for educating the investors in general and students in specific. He also highlighted the role of capital markets in the economy and their efforts to increase the confidence of the investors in the local markets.
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