ISLAMABAD, Aug 22: The State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) will work in close cooperation to build up a strong and effective regulatory framework in the country, it was decided by their heads Dr Ishrat Husain and Dr Tariq Hassan here on Friday.
They were presiding over the 8th meeting of the SECP/SBP Coordination Committee held at the SECP headquarters. Other senior officials of the two capital market regulators were also present.
Such meetings, SECP spokesman stated, were held once in every three months with a view to supplementing the ongoing regular coordination between the two institutions on all matters of mutual interest.
The SBP and the SECP, it was further resolved, would work to institutionalize the crisis management mechanism evolved by them.
While endorsing the ongoing action against brokerage and forex companies involved in illegal, unauthorized and fraudulent activities, they resolved to pursue their procedures in these matters vigorously.
Dr Tariq Hassan, who took over as SECP chairman early this week, reiterated that effective enforcement of relevant rules and regulations as well as institutional strengthening would be major area of focus for the SECP as it embarks upon a new era of sustainable development for the capital market and corporate sector in Pakistan.
He assured Dr Ishrat Husain of the continued cooperation by the Commission in building a strong regulatory framework within the country. The SECP had come a long way since its inception in 1999 and would continue the process of developing the regulatory system, Dr Hassan added.
The regulatory activities of the two institutions, he went on to observe, could only be met through a consultative process with all stakeholders and he intended to adopt a participatory approach in fulfilling the SECP’s mandate, he stated.
He also reaffirmed the Commission’s resolve to continue to facilitate investors by promoting an efficient and transparent capital market and corporate sector and endangering confidence and faith in the integrity of the market.
The SECP would also be looking into measures for deepening the market still further and improving risk management, especially at this time when the market was performing remarkably well.
The SBP governor while congratulating the SECP chairman, assured him of continued cooperation and facilitation by the central bank. He hoped that the Commission would continue to be an effective and efficient regulator under the chairmanship of Dr Hassan. He also stressed the need to establish easy access to data between the two institutions.
Included in the agenda of the Coordination Committee’s meeting, besides the ongoing proceedings against a number of brokerage and forex businesses, were such projects as margin financing and monitoring of non-bank primary dealers.
While discussing the non-regulated brokerage business, the two regulators took serious notice of the fact that many players in the market were trying to take advantage of the division of regulatory authority between the SECP and the SBP.
It was, therefore, decided that they would continue to work together to ensure that a comprehensive regulatory framework was in place.
They further resolved that they would make joint efforts to create awareness among the public regarding the legal position of investment with such individuals/companies.