Khalid Mirza, Member, Securities and Exchange Policy Board (SEPB, the "Policy Board") Friday conveyed to the Chairman, National Accountability Bureau (NAB) that the SECP Policy Board cannot make any staff appointments whatsoever, and therefore, the question of illegal appointments simply does not arise.

In a letter to the chairman NAB, Khalid Mirza, who worked as chairman SECP Policy Board, stated that it should be unequivocally understood that under the law the Policy Board is entrusted with certain responsibilities and functionalities but it does not have any executive authority or role of any kind.

Also, other than the fact that the chairman presides over the SEPB meetings, he does not have any special role or capacity with respect to the Policy Board's decision making, and at best he can be simply regarded as first among equals.

Needless to say, no Policy Board member, including the chairman, can take any decision on his own and all Policy Board decisions are taken collectively by the members in formal meetings convened for this purpose.

It must be further emphasised that, a Policy Board member is not an "office holder" as such, nor does being a member of the SEPB mean or be tantamount to even part-time employment.

Members are only required to attend SEPB meetings or its committees without any official role outside these meetings, he said.

Mirza pointed out that the NAB had called for progress reports from the concerned senior NAB officials regarding three inquiries ordered by the chairman NAB.

These included an inquiry you had instructed director general, NAB, Rawalpindi to carry out primarily with respect to illegal appointments allegedly made by me in my capacity as chairman, SEPB and other sundry matters i.e. interference in the affairs of the Securities and Exchange Commission ("SECP", the "Commission"), attempting to influence the NAB investigations through media interaction, and criticism of the NAB in connection with the SECP's staffing issues, Khalid Mirza said.

Member SECP Policy Board stated that the Policy Board cannot make any staff appointments whatsoever. Secretarial as well as expert assistance, if any, required by the board, is provided and paid for by the commission in accordance with the law.

The fact of the matter is that the Policy Board or a board member, including the chairman, does not have the privilege or power to make appointments. Therefore, the question of illegal appointments simply does not arise.

Without the authority to make appointments, abuse or misuse in the matter of making appointments is really not possible, and the underlying basis for the investigation just does not exist.

Third, by merely stating the fact that the SECP staff had stopped working for fear of arrest cannot be regarded as interference in the affairs of SECP. At the same it must be recognised that the SECP Act has entrusted the Policy Board with the duty of oversight over the commission's performance so that the purposes of the Act are achieved.

Also, the Policy Board seeks to operate in a transparent, truthful and overboard manner any comment by the Policy Board or its chairman or a member, whether in public or private, on the commission's performance has to be viewed in this light, Khalid Mirza said.

Fourth, the law does not bar Policy Board members, including the chairman, from interacting with the media and issuing public statements, and this, in and of itself, cannot be regarded as influencing any investigation by the NAB as alleged.

It is simply impossible to envisage that an institution with the stature and concentration of power and discretionary authority vested in the NAB can be ever, directly or indirectly, influenced by the Policy Board or a member of the Policy Board, including the chairman, whether through interaction with the media or otherwise.

Fifth, the law provides for the beneficial regulation of the capital market and superintendence of the corporate sector, which is a basic requirement for investor confidence and mobilisation as well as allocation of capital on a risk adjusted basis.

This is not possible without creating propitious conditions for Pakistan's corporate and securities regulatory apparatus comprising SECP and SEPB to function professionally and autonomously.

The government and by extension all its agencies, attached departments, and authorities are thus enjoined by law to support the operational and functional independence of the securities and corporate regulatory establishment.

Further, specifically, the legislature in its wisdom has gone further and recently inserted Section 41B that immunes SECP and its staff from any intervention by law enforcement agencies ("LEAs"), including the NAB, member SECP Policy Board said.

He said that the NAB has incontrovertibly erred by embarking upon an investigation into unlawful appointments, since the basis for such an investigation simply does not exist. Similarly, the other minor matters raised reflect an inaccurate understanding of the facts and/or the law.

In view of all this, the NAB would do well to retract instructions for the holding of this inquiry, which obviously makes no sense and would be a waste of time and resources. However, in relation to the afore going, one aspect remains somewhat puzzling: It is not.

Lastly, while it is fully appreciated that the LEAs must be assisted and facilitated in accordance with the law, the LEAs must also recognise and be supportive with regard to the onerous responsibilities that are being discharged by regulatory institutions, and particularly in respect of the securities, regulator, fully respect the binding provisions contained in Section 41B of the SECP Act, Khalid Mirza added.