ISLAMABAD: Finance Minister Ishaq Dar directed the Securities and Exchange Commission of Pakistan (SECP) to adopt ‘zero tolerance’ for market manipulation and insider trading.

He also emphasised the need for developing the non-conventional banking sectors in the country. “The SECP should focus on development of non-banking finance institutions, insurance sector and development finance institutions (DFIs) for economic advancement,” the minister said on Monday during a visit to the SECP Headquarters.

The minister said that incidents of insider-trading and market manipulations, like price manipulation, blank selling, front running, etc, have severely damaged small investors and these must be curbed for protection of investors’ interests.

He demanded penalising black sheep in the stock market so that it serves as deterrence and the menace is curbed.

The commission should appoint people of high standing on the boards of stock exchanges who may bring transparency in stock exchanges and may be helpful in de-mutualisation of the exchanges,” the minister also emphasised that disbursement of dividends on bonus shares needed to be promoted as it would encourage small investors.

He emphasised acceleration in development of non-banking financial sector and the insurance sector and asked the commission to come up with proposals as a priority.

The minister also directed the SECP to take steps for development of Pakistan Mercantile Exchange.

He said when the present government took over, all the international financial institutions were fearing that the Pakistan would default by 2014, but now with positive and sincere steps, not only the financial credibility of Pakistan has improved, but foreign reserves which earlier stood at $7.5 billion are now in the range of $16bn.

Dar also highlighted the importance of REITS (Real Estate Investment Trust (REITs), saying it is an important medium of capital formation and channelising the general public savings towards developing the real estate in Pakistan.

He advised the commission to take initiatives to educate investors and to make efforts for development of mutual fund industry so that common people may invest in the capital market through mutual funds.

SECP Chairman Zafarul Haq Hijazi gave a presentation to the minister on the working of commission and various initiatives.

Published in Dawn February 17th , 2015

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