Securities and Exchange Commission of Pakistan (SECP) Chairman Dr Tariq Hassan has said that stern action would be taken against illegal brokerage houses, while action against 97 trading companies is being taken, show cause notices have so far been served on 30 companies while decisions have been made against 20 companies.
He was delivering his speech at the fifth road show on investment in the capital market, jointly organised by Central Depository Company (CDC), SECP and Lahore Stock Exchange. He said that SECP was taking revolutionary steps to redress the grievances of the investors particularly smaller investors and providing them protection, education and guidance. He said that investors play a fundamental role in the growth and development of the capital market.
In this regard, investors' education and awareness play a significant role in the vibrant and dynamic capital market. Moreover, it also promotes the growth of a solid retail investors' base in the country, which would provide retail investors an opportunity to participate in the economic development of the country. He emphasised the need to enhance the investors' base.
Dr Tariq Hassan said that the second phase of the SECP 'reforms process is currently underway and is geared towards introducing structural changes in the exchanges which would help minimise market abuse and thereby afford greater protection to the investors.
These reforms include an agenda for demutualisation of the exchanges which would ensure a separation of ownership and trading rights at the exchanges, the phasing out of the Badla/ Carryover Trade (COT) financing and the closure of group accounts.
SECP has made considerable efforts towards enhancing the regulatory frame work and it was currently working on the development of new laws such as the securities Act, the Future ACT, and the Financial Services Commission Act, code of conducts for investment advisors and research analysts.
Dr Tariq Hassan further said that SECP has also formed an expert committee to prepare a feasibility report for the introduction of derivative products in the market. This committee is to submit its report in November 2005. The CEO of CDC, Hanif Jakhura, said that this series of Road Show is the first venture of its kind on this scale.
He informed that the Road Shows are targeted to attract savings to the Capital Market from small cities by educating investors about the risks and benefits of investing in the market and also provide a forum to address the misconceptions associated with stock market investments.
"The regulatory steps taken by the government" Jakhura mentioned "have made working of the stock exchanges more transparent" he said. "This initiative also provides a forum to fund managers, brokerage houses and financial institutions to reach out to the investors in small cities across Pakistan" he added. CDC is an infrastructure company of the Capital Market and the only electronic depository of shares in the country which offers unmatchable benefits of instant shares credit, greater liquidity, stamp duty and postage cost savings, reduced workload and costs for issuers, quick service and convenient accommodation of voluminous shares issues.
Earlier Abid Ali Habeeb, Hamid Imtiazi, Muhammad Suhail, Dawood Jan Muhammad, Rafiq Umar, Afsheen and Rashid also spoke.
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