ISLAMABAD: The Securities and Exchange Commis­sion of Pakistan Policy Board on Friday rejected the budget framed by SECP, directing it to resubmit the draft by Jul 1 with a 70-80 per cent reduction in regulatory fee.

Chairing the meeting, SECP Policy Board Chairman Khalid Mirza reviewed the budget prepared by the commission as well as the implementation status over its previous directives. During the course, the meeting reprimanded the regulator’s management on a number of issues.

The commission is represented by Chairman SECP Farrukh Sabzwari in the Policy Board who maintained that reducing the fee structure drastically would lead to a drop in the regulator’s revenue and could lead to serious financial setback.

However, talking to Dawn, Mirza said that the high fees are restricting the growth of market and is a redundant approach which has been discarded all over the world.

“The regulator is charging eight basis points on assets under management (AUM) and have directed the Commission to reduce it to 2bps, which is highest in the world,” he said, adding, “The modern approach is to increase earnings through higher volumes and not higher taxes and fees.”

According to Mirza, low fee structures will invite more investments in capital markets and encourage new investors in various products.

The board was also critical of the practice of SECP posted in National Accountability Bureau, Federal Investigation Agency and others working in coordination with investigation agencies, and the regulator was directed to repatriate these 14 officers.

SECP Chairman Farrukh Sabzwari faced criticism for the delays in implementing the decision with Mirza maintaining that it was not a healthy sign for SECP officers to serve in other agencies.

“This taints their minds as SECP is a corporate sector regulator and deals with white collar crimes - not violent crimes etc,” he said, adding “By allowing bankers and chartered accountants to work for FIA or NAB etc, it will only make them act like policemen.”

Published in Dawn, June 22nd, 2019