ISLAMABAD, March 31: The Securities and Exchange Commission of Pakistan (SECP) has constituted a task force to investigate and identify the factors that led to the recent stock market crisis and suggest measures to further strengthen the regulatory regime.

This was stated by the Chairman, SECP, Dr Tariq Hassan, while speaking at a press conference here on Thursday.

Asked whether the commission took the decision on Prime Minister Shaukat Aziz’s directive on Wednesday that the SECP must get to the bottom of this matter (market crisis), he said the move had nothing to do with the premier’s directive and that the commission was doing it on its own to further strengthen the regulatory regime.

The chairman said Justice (Retd) Saleem Akhtar had been appointed the chairman of the task force. The number of the members, to be taken from the private sector, could be from five to seven and that their nomination would be announced within a couple of days, he said.

The tasks force would complete its report within a month and would work independently parallel to the SECP team already busy in inspecting brokers and investigating insiders trading, market abuses and manipulation, Dr Hassan maintained.

Replying to a question regarding the appointment of the chairman of the task force, he said Justice (Retd) Saleem Akhtar “is a man of integrity” and would help the commission investigate what actually happened in the market during the past two weeks.

He said the task force would be free to meet anyone including some of the brokers who had asserted, during their interviews to some TV channels, that they had evidence of the involvement of some big fish in the recent market crisis.

He said it was premature to talk about the reasons behind the stock market crisis at this tage and it needed full study, however, he thought that it was the over-speculation which led to the market crash.

Dr Hassan said the SECP would also hold a meeting with the officials of the Karachi, Islamabad and Lahore stock exchanges here on Friday to discuss the adoption of the proposed risk management measures by the stock exchanges.

The chairman also warned against delaying the implementation of the SECP’s proposed reforms by the stock exchanges while creating crisis as the SECP was resolved to implement the reforms.

To a question he said all the stakeholders were agreed to the demutualization of the stock exchanges, however, there were some problems in developing consensus on the proposed integration of the stock exchanges.

The SECP will also make a presentation to the Public Accounts Committee on the stock market crisis here on Saturday, the chairman said while responding to a question.

In the parliamentary system, the parliamentarian should have to be informed about various issues, he replied when asked that the Public Accounts Committee had directed the commission to let it know the real situation of the stock market.

Dr Hassan said the Badla Financing will be completely phased out from June 3, because it encouraged over speculation and allowed the weak holders to enter the market which was an artificial way of boosting the stock market.