ISLAMABAD, Aug 13: The revised Securities and Exchange Commission of Pakistan (SECP) Act has suggested replacing appellate bench within SECP with a tribunal and substantial increase in the amounts of fine.

The SECP Act 2010 is scheduled to be taken up by the National Assembly Standing Committee on Finance on August 18 as a prerequisite to its approval from the parliament.

The revision of SECP Act 1997 and establishment of an SECP Tribunal has also been a demand of donor agencies. Te draft law suggests that all the appeals against the decisions of the SECP would not be heard by its appellate bench and appeals can be filed at the tribunal only.

Currently there is only one appellate bench at the SECP as there are only two commissioners and one of them is the chairman.

“Besides the tribunal is also beneficial for the SECP as orders related to cease of property etc., can be obtained easily by the commission,” said a senior official of the SECP. “Presently we have to obtain such orders from the court which is cumbersome and difficult to explain as these are technical matter.”

The SECP official expect that many issues related to court matters would end up fast after the establishment of the tribunal, specifically for the corporate regulator.

“The simple cases related to winding-up of a company drags for three years due to delayed hearings at regular courts,” he said.

While, the SECP officials are expecting that the draft would become a law before the end of 2011, but having high hopes related to the establishment of the tribunal is impractical.

The Competition Commission Law was approved by the president of the country on October 13, 2010, but the prime minister notified the establishment of Competition Commission in July 2010.

To complicate the matter for the SECP tribunal the draft law says that the tribunal would be headed by a retired judge of High Court or equivalent and the other member shall be a technical person.

“The real test will be the compatibility of any technical person along with the retired or serving judge at the SECP tribunal,” said a senior SECP official.

Apart from the tribunal the other major change in the SECP Act 2010 is the increase and introduction of various penalties.

Regarding the contravention of or failing to comply with any provision of this act or subsidiary legislation for which a specific penalty is not provided under this act, an individual will be penalised Rs100 million and a corporate body will have to pay a fine of Rs200 million.Currently the maximum penalty for contravention or failing to comply with any provision of SECP act is up to Rs50 million to an individual or corporate body.

There is fine proposed of Rs5 million and Rs10 million on individuals and the corporate respectively for concealing information.

“This clause is very essential as most of the investigations are delayed only because the relevant persons try to delay in providing the required information,” said an SECP official. “One of the most common hurdles in the way of investigation is lack of proper information as people conceal them.”

The SECP Act 2010 is designed to make the corporate regulator strong and effective, but the management of the SECP will have to satisfy the NA standing committee that how these powers will not be misused by the officials of the commission.