A joint task force of State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) are going to delineate standard operating procedures (SOPs) or effectively regulate the conglomerates in the country. In a meeting held at Karachi at SBP head office, the two teams gave the reasons for a regulatory action against KASB Bank and KASB Capital (brokerage arm).
SBP officials were confident that the bank would be merged or sold within the next three to four months while the SECP officials felt that they along with NCCL would smoothen out the repercussions of negative capital and breach of trading limit. SECP told SBP that it sees no problem in KASB Mutual Fund and Modaraba and all the investors would have speedy disbursement of their securities and cash margins.
Both the regulators were very clear that there were lessons to be learnt from a highly unsavoury episode and have faced issues which were not envisioned earlier. It was felt that the regulators needed to create a framework for banking and non-banking companies under common ownership. Rules need to be framed with a view to pre-empting the recurrence of similar episodes.
SECP told SBP that KASB Securities were holding Rs 160 billion in securities and Rs 13.5 billion in cash of their clients as against a traded amount of Rs 1.2 billion. The next meeting of the joint task force will take place next month. It is likely that the settlement bank and brokerage firm would have different ownerships since a common ownership has created settlement problems for the equity market.
Comments
Comments are closed.