ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Friday forwarded details of M.R. Securities to international regulators through the International Organisation of Securities Commissions (IOSCO).
Lahore-based brokerage M.R. Securities has been charged by the SECP for involvement in financial fraud. The details have been reported to the Financial Monitoring Unit to initiate action under the Anti Money Laundering Act, 2010.
There is a trend among Pakistani financial fraudsters to run abroad, assuming that it will make them disappear from the radar of the local regulator.
The owners of defaulting brokerage houses such as Ace Securities, Stock Street, and M.R. Securities are all believed to be hiding abroad.
Reporting measures by the SECP will help discourage securities’ fraud and improve accountability.
“The SECP will continue to report to international regulators any stockbroker found involved in securities fraud in Pakistan,” said SECP Chairman Zafar Hijazi.
The SECP is a member of IOSCO, the international body that brings together securities regulators from all over the world and sets standards for the sector.
Its members regulate more than 95 per cent of the world’s securities markets in more than 115 jurisdictions.
The SECP is approaching IOSCO for such information sharing on financial fraud under a multilateral memorandum of understanding to which SECP is a signatory.
Earlier in a joint meeting, the SECP and the State Bank of Pakistan (SBP) voiced their concern over financial scams and frauds, including illegal deposit taking.
The two regulators resolved to pay special attention to such fraudulent activities by adopting a coordinated approach along with the cooperation of law enforcement agencies.
The SECP is also working on developing a mechanism for collecting market intelligence about potential financial scams in incubation.
In a recent announcement Chairman SECP had announced that market intelligence mechanism would work in close cooperation with the SBP.
“This intelligence mechanism shall enable regulators to act more proactively to minimise losses to unsuspecting investors,” Mr Hijazi had announced recently.
This market intelligence mechanism for detecting scams will be complemented by additional security measures against fraudsters after their cases have been detected and concluded.
Published in Dawn, March 4th, 2017
