Laws being formulated to curb financial fraud

Victims will be returned looted money to increase investor confidence, raise savings rate

KARACHI:

Pakistan is working on laws to give punishment to those who commit financial fraud and get back and return the looted money to the fraud victims in an effort to increase investor confidence, multiply the number of investors and jack up savings rate in the country.

After inaugurating the World Investor Week 2024 at the Pakistan Stock Exchange (PSX) at the gong ceremony on Friday, Securities and Exchange Commission of Pakistan (SECP) Chairman Akif Saeed said the country lacked such laws that could punish the people committing fraud and return the recovered money to the fraud victims.

"Laws are a must to instill confidence among investors and increase the rate of savings in the country," he said.

He urged stockbrokers and stakeholders to make investors well aware of the risk factors for investment in stocks along with the reward for investment.

He underlined the need for developing an investment and savings culture, adding that for the purpose financial literacy should be made part of the curriculum at schools, colleges and universities.

He pointed out that the PSX, Pakistan Mercantile Exchange (PMEX) and State Bank of Pakistan (SBP) were observing the global investors week in Pakistan, aimed at spreading financial literacy across society and encouraging students, housewives and corporate employees to become new portfolio investors.

To mark the week, capital markets are organising awareness sessions at universities, banks and corporate firms throughout the country.

He said the use of technology had made investment easier, reducing the cost and time for financial transactions significantly. At the same time, however, the risk of scams has also gone high globally.

Later in the day, while speaking at the investor week at commodity futures market PMEX, Saeed stressed that the mercantile exchange should expedite work to enable farmers to sell agricultural products on the futures counter.

Welcoming the SECP chairman, Pakistan Stock Exchange (PSX) acting CEO Nadeem Naqvi advised investors, especially the new entrants, not to invest their entire savings in stocks, but begin with a small amount and restrict it in the range of 20-25% as there always remained the risk of losing money.

He said the stock market had introduced Sahulat Account that investors could open online within 10 minutes for making investment at the PSX with the maximum limit of Rs1 million. Later on, investors may migrate to big investment accounts.

He said the Sahulat Account was not available a year ago and its objective was to increase the number of investors at the PSX.

PSX Chairperson Dr Shamshad Akhtar said the available data suggested that the stock market gave an average 15% return on investment in US dollar terms over the past 20 years.

She emphasised that equipping the future generation with financial literacy was a must to increase the rate of savings and investment in the country.