The Securities and Exchange Commission of Pakistan (SECP) - in the aftermath of the unceremonious removal of its erstwhile chairman Mohammad Ali Ghulam Mohammad on orders of the Supreme Court of Pakistan after the apex court ruled his appointment in conflict with the requirements of the SECP Act, 1997 - faces a tough challenge to restore its credibility and integrity as a financial regulator in Pakistan.
The immediate task at hand for the Ministry of Finance would be to appoint a chief who is upright and has the respect among the business and corporate circles. Khalid Mirza has the right credentials to resolve the multiple issues faced by the SECP and restore its stature as an authoritative and credible regulatory body which could facilitate foreign investment and eventually foster economic growth in the country. Khalid Mirza was appointed as the Chairman of SECP in 2000 after the dissolution of the Corporate Law Authority (CLA), and was instrumental in laying its solid foundation.
Khalid Mirza has also served as a senior official of the International Finance Corporation (IFC) and was posted as Chief of IFC's Regional Mission in Bangkok, Thailand. He also worked in several countries and possesses extensive experience of capital markets development in the emerging markets. He also played a pivotal role to set up the Competition Commission of Pakistan (CCP) in 2007. The Commission deals with issues that directly touch economic life of the citizens of Pakistan and has gained international recognition.
The sole criterion going against Khalid Mirza is his increasing age as now he is well above the age limit of 62, a clause introduced by the then chairman of SECP in the Finance Act, 2008, ostensibly to disqualify Khalid Mirza from regaining control of the Commission as he has the reputation of being a much-feared watchdog. This intricacy can be resolved by appointing him as the interim chairman of the SECP as rules do not specify the age limit for an interim head.
Commission's reputation as a sound regulator in the last few years has unfortunately eroded through successive appointments motivated by political considerations. As it will take time before the finance ministry finalises the intricate procedure for appointing the chairman from the private sector on the basis of seniority and merit as directed by the Supreme Court, so it will be apt to utilise this intervening time period to re-establish the integrity of the Commission, which has a crucial part to play in the growth and prosperity of Pakistan.