High regulatory fees resented: Policy board rejects SECP-framed budget

The Securities and Exchange Commission of Pakistan (SECP) Policy Board Friday rejected the annual budget (2019-20) framed by SECP on the grounds that it is unfriendly for investors and directed the Commission to resubmit the draft by July 1. The policy board meeting held here in the SECP head office reviewed the budget prepared by the Commission and the implementation status over its previous directives but the meeting resulted in admonishment for the SECP management.
The meeting chaired by the chairman SECP policy board Khalid Mirza was critical of high regulatory fees charged by the Commission and directed the SECP to reduce it by 70 to 80 percent. The Commission is represented by the chairman SECP in the policy board who maintained that reducing the fee structure massively would lead to a drop in the SECP revenue and could lead to serious financial setback for the corporate sector regulator.
Talking to media, Khalid Mirza said that the high fees are restricting the growth of market and the redundant approach has been discarded all over the world. "The commission is charging 8 basis points on AUM and have directed the Commission to reduce it to 2 bps, which is the highest all over the world," he said adding, "The modern approach is to increase earnings through higher volumes and not higher taxes and fees."
The chairman SECP Policy Board said that the low fee structures will invite more investments in capital markets and encourage new investors to invest in various products. The SECP has been directed to present a new draft of the budget by July 1. The board was also critical of SECP employees currently posted in NAB, FIA and other working in coordination with other investigation agencies, and the Commission had been directed to repatriate these 14 officers.
It was not a healthy sign for SECP officers to serve in other investigation agencies. "This taints their minds as SECP is a corporate sector regulator and deals with white-collar crimes - not violent crimes etc," he said, "By allowing bankers and chartered accountants to work in FIA or NAB, etc, will only make them act like policemen." On the other hand, the chairman SECP responded that the officers will be called back gradually, which further infuriated the members of the policy board, and the SECP was directed to bring back all the cases forwarded to NAB and initiate the proceedings as per the corporate laws.