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SECP wants certified market players

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Tuesday directed the country’s three stock exchanges to introduce certification programmes, for the growth of capital markets and greater investor participation, for market players to further enhance their knowledge and to make trade practices more ethical and responsible.“

Currently anybody with enough cash to buy a seat in the stock market can become a broker and anybody whose willing to do the job can be a broker’s agent — but these people are entrusted with life savings of the general public,” said Muhammad Ali, Chairman of SECP.

The Institute of Capital Markets (ICM) is currently conducting a certification programme, which is expected to be expanded soon. However, it is optional for brokers and dealers but the SECP intends on making the programme mandatory for all market players in order to conduct trade transactions for investors.

“We plan to make this requirement mandatory soon — it will be done eventually and the commission is in process of formulating regulations in this regard,” the chairman SECP said.

The ICM is also working on different certification programmes and training sessions for brokers and dealers, depending on their years of experience in the market.

“The fresh entrants in the markets will be taught about the systems and regulations whereas senior brokers need not be taught about the stock market but they need to be educated about compliances related to ethics, and other responsibilities of this trade,” the SECP official told media.

SECP said a key reason for limited investor participation in the stock market was due to lack of trust and such up-gradation of human resource programmes may bridge the gap.

“The other main reason for the low public participation by general public in the stock exchanges is lack of knowledge,” Ali said adding that the SECP along with the brokers and authorities of the exchanges were working on various programmes to develop investor education.

The majority of the CDC account holders are in Karachi 140,000 followed by 51,000 CDC account holders in Lahore, 25,000 each in Rawalpindi/ Islamabad and Faisalabad has 6,000 stock market investors.

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