Sindh High Court (SHC) has barred the Securities and Exchange Commission of Pakistan (SECP) from taking any coercive action against the stockbrokers resisting ICM certification through grandfathering. The SECP Circular 9 of 2015 requires the grandfathered members of ICM Stock Broker Certification (SBC) to obtain Fundamentals of Capital Markets (FCM) and Pakistan''s Market Regulations (PMR) certifications.
Karachi Stockbrokers Association (KSA) on December 10 last year decided to knock the door of judiciary against what a broker angrily said ICM''s "money making scheme" when the Institute had set December 31 as a deadline for the brokers to get certified. "Over 75 brokers petitioned in the High Court which has issued a stay order in our favour," a KSA spokesperson told Business Recorder. SHC, he said, barred SECP from taking any "coercive action" against KSA members till its next hearing slated for July 13.
The ICM certification, the spokesman said, would cost the brokers Rs 45000 for each of the hundreds of employees working at their brokerage houses for last several years. "Having 20-year experience, you have to undergo grandfathering which would be renewable annually," he said. Contacted a KSA office-bearer, requesting anonymity, said the court order was welcoming.
"Brokers are happy about the court order and strongly have been given an impression that this ICM has been set up to make money," he said. Meanwhile, in a statement, KSA said the SHC Wednesday restrained SECP from acting against Karachi stockbrokers for not complying with requirement of mandatory certification of market intermediaries through ICM. KSA has filed a constitutional petition, CPD 3821/2016, challenging the SECP directives for obtaining PMR, FCM and SBC (Stock Broker Certification) or avail ''Grandfathering Provision'' by June 30, 2016 through circulars numbering 09/2015 and 47/2015.
Advocate Amjad Javaid Hashmi was the counsel of brokers who argued that the directions for mandatory certification were "ultra vires" of the substantive provisions of SECP Act, 1997. "After hearing the petitioner''s counsel, the court while putting the respondents on notice granted interim stay and adjourned the matter till 13-07-2016," it said.
ICM, the country''s first securities market institute aiming to develop human capital with certified knowledge and undertaking of independent research, warned that "NO" request for awarding certification under grandfathering option shall be entertained whatsoever after the deadline. "From January 1, 2016, all such candidates mandatorily required to obtain certifications shall have to go through the examination route only," it said in a hard-worded email which fell heavily on the brokers.