ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) and Senate Standing Committee on Finance Chairman Saleem Mandviwalla seem to be poised for a showdown over the former’s intervention in the functioning of the Pakistan Stock Exchange (PSX).

The Pakistan Peoples Party (PPP) senator and former finance minister on Saturday lambasted the corporate sector regulator over its unfair interference in the PSX.

Earlier, the senator had criticised the SECP for its action against Lahore, Islamabad and Karachi-based stockbrokers and decided that the committee would take suo motu notice against the regulator over its actions.

In response, the commission met PSX representatives and several stringent measures were finalised to streamline the trading on the stock market.

In a statement, issued on Saturday, Mr Mandviwalla said: “I am not trying to protect stockbrokers; whoever is doing something wrong should be penalised and action should be taken against them. But market intervention by [the] SECP will not be tolerated.”

He said that ‘single-member companies’, which had been banned from obtaining brokerage house licences, had been operating for several years. He alleged that the real failure was on the SECP’s part, which had been unable to conduct a thorough study had allowed single-member brokerage houses to operate for so long.

The senator also criticised SECP Chairman Zafar Hijazi and, addressing him directly in the statement, claimed Mr Hijazi had called for the formation of an association of brokers from across the country.

“But he does not know that it already exists and Yaseen Lakhani is its chairman... it is called the PSX Brokers Association,” the PPP senator said, adding that SECP intervention could harm the performance of the stock exchange and scare away foreign investors.

On its end, the corporate sector regulator has sought support from the federal government. Finance Secretary Tariq Bajwa, who is also chairman of the commission’s policy board, lauded the SECP’s recent enforcement measures to curb financial scams, including insider trading and other market malpractices.

Chairing a meeting of the policy board at the SECP head office on Saturday, Mr Bajwa assured the regulator of his full support to eradicate market abuse and restore investor confidence.

The meeting was attended by the SECP chairman, commissioners and executive directors. The chairman also updated the secretary on the legal and regulatory actions taken by the SECP against those involved in market abuse, an official statement said.

The federal secretary was briefed on the SECP’s functions and responsibilities and its proactive role towards the creation of a fair and efficient corporate sector, capital market, non-bank financial sector, Islamic finance and insurance, the statement said.Mr Bajwa appreciated the SECP’s efforts and reforms introduced for the development of capital market, the statement concluded.

Apart from the suo motu action against the SECP, Mr Mandviwalla had spearheaded the campaign against the Companies Ordinance, recently promulgated by the president.

The ordinance was struck down after a resolution, led by Mr Mandviwalla, was approved in the Senate. Now, the Companies Bill 2017 is expected to be presented before the Senate Standing Committee on Finance in the coming weeks.

“We will approve the bill, but it has to come through a proper channel and not via short cuts,” he had said.

However, it is expected that SECP officials will likely be grilled by the Senate committee over the measures taken by the commission during the period the Companies Law was in force as an ordinance.

Published in Dawn, February 26th, 2017