LAHORE, July 10: The Board of Directors of Lahore Stock Exchange (LSE) will meet here on Thursday to consider the Securities & Exchange Commission of Pakistan’s (SECP) directive to reverse its previous decision to withdraw service charges and reduce the rate of members contribution towards the Members Contribution Fund (MCF).

The directive was issued by the SECP on Tuesday after a meeting with the LSE directors only a day before in Lahore. The SECP officials were not convinced by the rationale advanced by the LSE directors for withdrawing service charges of Rs3.75 per Rs100,000 and slash the members contribution towards the MCF to Rs3.75 from Rs5 per Rs100,000.

The Commission found the rationale and reasons put forward by the directors to support their decision taken in February as invalid and directed the LSE to revise the decision and restore the previous rate of service charges and the members contribution towards the MCF.

It may be mentioned here that the LSE managing director and outside directors had opposed the proposal that was carried by majority elected directors of the LSE. The decision, according to its proponents, was taken to boost the trade volumes — the very objective that the LSE failed to achieve despite its controversial decision.

The SECP has directed the LSE directors to reverse their decision by July 12, saying no such decision could be taken by the stock exchange without seeking prior permission from the Commission.

Talking to Dawn here on Wednesday, some independent directors were of the view that the LSE was not bound to implement the SECP directive. Others, however, claimed that the board of directors was bound to accept the regulator’s directive.

When approached, a senior LSE official declined to comment on the situation that could arise in case the board of directors refused to implement the SECP directive and go ahead with its previous decision. “We are meeting tomorrow, let’s wait and see what happens,” he said.