ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has decided to approach the Financial Conduct Authority (FCA) of the United Kingdom regarding the misappropriation of funds and illegal deposit-taking by Mazhar Rafiq of M.R. Securities, a broker who recently defaulted and fled the country.
The move by the SECP is likely to curb further misconduct and market abuse by the brokers of the Pakistan Stock Exchange (PSX).
SECP Chairman Zafar Hijazi on Thursday approved the use of the International Organisation of Securities Commissions (IOSCO), which is the international cooperation forum for the regulation of securities laws, to confront bad players in the market.
The SECP has obtained information about British passports and travel details of the owners and director of the defaulting brokerage, which will be shared with the FCA, the regulator of the UK capital markets.
The SECP, under the IOSCO multilateral memorandum of understanding (MMOU), is providing the records and particulars of the owners of another defaulting broker, Ace Securities, to the Canadian securities regulatory authorities, which are ‘very responsive’ to the SECP’s earlier requests for assistance in the matter of absconding brokers.
The SECP has also provided details of some potential defaulting brokers to the interior ministry for the placement of their names on the Exit Control List (ECL).
The SECP is currently conducting a comprehensive scrutiny to find out the lapses that hinder it to effectively discharge its mandated task of controlling and minimising misconduct, market abuse and financial crime.
Considering that it is important to have unhindered access to information and data relating to the SECP’s inquiries, investigations or inspections, the SECP has also written to the Ministry of Interior through the Ministry of Finance for direct access to telephone call data, family tree of CNIC holders, immigration and passport records and facilities of digital/cyber forensics from relevant agencies.
In another development, the SECP has taken notice of certain stock market research reports that have taken an extremely speculative approach to sensitive matters that remain sub judice.
It is inappropriate for research analysts to speculate on how much the KSE-100 index is likely to fall or rise based on possible outcomes of court cases.
The SECP directed analysts to strictly comply with Research Analysts Regulations 2015 and Securities Act 2015.