December 24, 2006	Sunday	Zilhaj 02, 1427

KARACHI: From the doves such as Mian Mumtaz Abdullah, to the hawks of the likes of Khalid Mirza, the Securities and Exchange Commission of Pakistan (SECP) has seen more than half a dozen chief regulators of the country’s corporate sector since the body was first formed in 1977. It was Corporate Law Authority (CLA) until renamed as SECP on December 19, 1997 by an Act passed by the then Majlis-e-Shoora.

A former chairman of the apex corporate regulatory body said that the institution had minimal role, if at all, in the country’s policy of privatisation, disinvestment and deregulation. “Regulators work as the watchdog of not the policies (which are framed by the government) but their implementation,” he said.

A corporate lawyer recalled that Pakistan had adopted Australia’s “single corporate regulator” approach to regulate the operations of companies. But a stock broker believed that the SECP was more pleased to identify itself with the American equivalent-- SEC.

But whatever the model, the question is how effective have been the regulators? Irtiza Hussain, after retiring as senior partner of the country’s top auditing firm, took up the job as the first chairman of the then Corporate Law Authority

(CLA).

He fathered the Companies Ordinance, 1984. But critics term it as a replica of the former companies act of the British Raj — except for a tick here and there and, of course, the change of fines from ‘annas’ to rupees. But Irtiza has to his credit of hitting hard on ‘inter-corporate financing’ by companies.

For lack of space, let’s skip the regulators in between and go straight to the iron fisted rule of the previous apex regulator Khalid Mirza. Even his worst critics would admit that most of the ‘reforms’ in the corporate sector were initiated and

implemented by a dogged determination of that one man, who most regulatees still love to hate.

The SECP, headquartered in Islamabad, wields enormous power to make rules and regulations and to enforce them. Neither would want to accept it, but ask any capital market participant and he would admit that there has always been a certain lack of co-ordination between the apex regulator (SECP) and the front-line regulator (Karachi Stock Exchange). Will that gap ever be bridged in the future? Looking at the recent scene, it might be, but at the slow pace of a spade of sand at a time.