The Securities and Exchange Commission of Pakistan (SECP) has proposed inclusion of 'insider trading' at stock exchanges as a criminal offence in the draft Securities Act which would replace the Securities and Exchange Ordinance, 1969. According to the SECP annual report-2012, the SECP is responsible to strengthen Anti-Money Laundering (AML) regime in Pakistan in the areas under its ambit including; NBFC, brokers, insurance companies and the NPO sector.
It liaises with the Ministry of Finance, the Financial Monitoring Unit (FMU), and the Asia Pacific Group (APG) to deliberate on international AML requirements and assists in implementing the measures. The SECP significantly contributed to drafting the Pakistan National Strategy for AML/CFT regime, which ensures effective implementation of the AML action plan agreed upon by all stakeholders. The strategy aims at reforming legal framework of AML/CFT; improve reporting, regulatory and disclosure regime, identify AML/CFT risks and improve capacities and skills of stakeholders requiring the SECP to effectively implement the AML/CFT regime.
The SECP made full compliance with the implementation of the recommendations identified within NBFCs, brokers and insurance sector, by Pakistan's Mutual Evaluation (ME) on AML/CFT regime, jointly conducted by the APG and the World Bank in 2009. The specific measures implemented include issuance of guidelines/circulars on Client Due Diligence (CDD)/Know Your Customer (KYC) for both brokerage firms and
insurance sector, changes in the inspection manual and conducting regular inspections with regards to AML. Under the new guidelines brokers and insurance companies are required to take reasonable measures for establishing the source of wealth and source of funds for high risk customers and also to obtain sufficient information to determine the expected source of funding for the account. Guidelines further reinforced STR reporting requirements for Compliance and the same has been made part of SECP's inspection manual and exchanges' system audit regulations (for brokerage firms).
The SECP being a member of AML Law Review subcommittee, contributed to the process of amendments/revision of the AML Act. In light of the recommendations of the APG and Regional Review Group (RRG), SECP proposed to include insider trading as a criminal offence in the draft Securities Act that on promulgation will replace the Securities and Exchange Ordinance, 1969 (SEO 1969), SECP report added.
Comments
Comments are closed.