ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) Policy Board Chairman Khalid Mirza on Tuesday noted that the regulator had capacity issues and was failing to function according to the law.

Talking to media after the board meeting, Mirza said the commission had not been able to perform its duties and responsibilities under the SECP Act, hence the suggestions of the policy board were not being implemented in letter and spirit.

“It was important for the SECP to keep pace with the policy board,” he asserted, adding that “my fear is that my aim of achieving a functional regulator within a year will not materialise and we will not see real results on the ground within the term of the current board.”

He also reiterated his criticism of FIA’s raid on the SECP office but did not name the agency.

“SECP was unnecessarily involved with law enforcement agencies, which is contrary to sound regulating practices as these agencies have a style of working which is not conducive for the development of the capital market,” he observed.

Mirza warned if the involvement continued the market players and investors could shy away from the stock exchange.

“The involvement with the law enforcement agencies is not only hurting the writ of SECP as the corporate sector regulator but also demonstrates its regulatory failure,” he remarked.

He said that possibly due to lack of capacity a number of recent regulatory notifications issued by the SECP were either unlawful or flawed.

He gave the example of some relaxation granted for female membership of the corporate board recently and said that the decision was made prior consultation of the policy board.

“If SECP works alongside the Policy Board it would be transformed into an effective and market friendly regulator and the capital market will be on a path of sustainable development within a year or so,” he said.

The policy board meeting expressed the hope that within three or four years, the goal of a viable capital market would be achieved.

The board granted approval to several proposed amendments in the SECP Act 1997, Public Sector Companies (Corporate Governance) Rules 2013, NCCPL Regulations as well as the Pakistan Stock Exchange (PSX) Rules Book.

Published in Dawn, March 6th, 2019