Equity market watchdog defends amnesty scheme
Decides to apply anti-money laundering laws enforced by banks.
ISLAMABAD:
c, countering fears of analysts who say that the scheme will allow big fish to legalise their ill-gotten money of the last four years.
Growing concerns that the proposed amnesty scheme for the revival of stock market would lead to violation of the Anti-Money Laundering Act and give people an opportunity to invest their black money were baseless, said Muhammad Ali, Chairman of Securities and Exchange Commission of Pakistan (SECP) while talking to the media here on Wednesday.
The country’s top economic manager, Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh, last month announced that the government would not ask the source of income for two years from those who would bring new investment in the stock market. The announcement has invited widespread criticism with many arguing that this will open the doors to legalising the money “made by selling arms and drugs”.
Ali said in order to prevent illegal money from entering the stock market, the SECP has decided to apply banking laws relating to anti-money laundering in the equity market.
The regulator is working on different proposals. “It will introduce a minimum holding period for investment so that investors do not get away with it,” he said, adding only that money would come into the stock market that had been made during peak period of the market but was not declared as the FBR had not asked for it.
However, Ali did not rule out the possibility of investment by those who made money from undeclared sources. He argued that in Pakistan there were many cheap and safe ways to legalise ill-gotten money, so people would not risk investing in the stock market.
Violation of laws
“Amnesty is always in violation of fundamental laws and institutions cannot run on probabilities, like people will not take risk in the stock market when they have other sources to do so,” said Dr Ikramul Haque, an advocate of the Supreme Court and an international tax counsel. He termed the proposed safeguard measures “cosmetic”.
He said those people who made money through illegal means in the last four years were behind this plan and its implementation would be tantamount to giving protection to these big fish.
Haque said that the scheme would nullify the Federal Board of Revenue’s (FBR) campaign to tax the rich. The FBR has unearthed many bank accounts where undisclosed money has been parked. According to an SECP letter to the FBR, applicability of Section 111 requiring details of unexplained income or assets may be deferred for funds invested in the capital market until June 30, 2014.
Published in The Express Tribune, February 9th, 2012.
c, countering fears of analysts who say that the scheme will allow big fish to legalise their ill-gotten money of the last four years.
Growing concerns that the proposed amnesty scheme for the revival of stock market would lead to violation of the Anti-Money Laundering Act and give people an opportunity to invest their black money were baseless, said Muhammad Ali, Chairman of Securities and Exchange Commission of Pakistan (SECP) while talking to the media here on Wednesday.
The country’s top economic manager, Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh, last month announced that the government would not ask the source of income for two years from those who would bring new investment in the stock market. The announcement has invited widespread criticism with many arguing that this will open the doors to legalising the money “made by selling arms and drugs”.
Ali said in order to prevent illegal money from entering the stock market, the SECP has decided to apply banking laws relating to anti-money laundering in the equity market.
The regulator is working on different proposals. “It will introduce a minimum holding period for investment so that investors do not get away with it,” he said, adding only that money would come into the stock market that had been made during peak period of the market but was not declared as the FBR had not asked for it.
However, Ali did not rule out the possibility of investment by those who made money from undeclared sources. He argued that in Pakistan there were many cheap and safe ways to legalise ill-gotten money, so people would not risk investing in the stock market.
Violation of laws
“Amnesty is always in violation of fundamental laws and institutions cannot run on probabilities, like people will not take risk in the stock market when they have other sources to do so,” said Dr Ikramul Haque, an advocate of the Supreme Court and an international tax counsel. He termed the proposed safeguard measures “cosmetic”.
He said those people who made money through illegal means in the last four years were behind this plan and its implementation would be tantamount to giving protection to these big fish.
Haque said that the scheme would nullify the Federal Board of Revenue’s (FBR) campaign to tax the rich. The FBR has unearthed many bank accounts where undisclosed money has been parked. According to an SECP letter to the FBR, applicability of Section 111 requiring details of unexplained income or assets may be deferred for funds invested in the capital market until June 30, 2014.
Published in The Express Tribune, February 9th, 2012.