Federal Finance Minister Ishaq Dar has asked the Securities and Exchange Commission of Pakistan (SECP) to adopt a policy of zero tolerance against insider trading and set the example by identifying and penalising black sheep in the stock market so that it serves as deterrence.
On his visit to the SECP office here on Monday, Dar said incidents of insider trading and market manipulation like price manipulation, blank selling, front running, etc had severely damaged the interest of small investors and must be curbed for the protection of investors.
He also highlighted the immense potential of non-banking financial institutions (NBFIs) and the insurance sector. He desired detailed presentations on these sectors based on the ideas presented so that necessary steps could be agreed and implemented for the development of the crucial segments.
Later, while speaking to the SECP employees, the finance minister said the role of SECP was not limited to regulating the corporate sector and the capital market, but also facilitating and protecting the small investors.
He highlighted the SECP’s recent initiatives including the development of sukuk regulations, book-building regulations, unit link rules for life insurance and approval of Real Estate Investment Trusts (REITs).
Dar expressed concern that the full potential of the Pakistan Mercantile Exchange was not being realised and hoped that the SECP chairman would take necessary measures for the development of the commodities market.
Advising the SECP to submit its tax proposals on priority, he cited the example of tax avoidance in relation to the levy on bonus shares. He declared that the issue would be settled in favour of the government.
While giving future guidelines, the finance minister said Pakistan had to go a long way for the development of financial institutions for long-term funding as commercial banks could not meet the financial needs for development of the industrial sector.
He said the government had taken measures to make Pakistan a sovereign country economically. When the present government took over, all the international financial institutions feared that Pakistan would default by 2014, but now with positive and sincere steps, not only the financial credibility of the country had increased but foreign reserves, which earlier stood at $7.5 billion, were now around $16 billion.
On the occasion, SECP Chairman Zafar Hijazi and commissioners gave a detailed presentation in relation to the SECP’s reform agenda and areas requiring the government’s support.
He said the SECP was very firm in its mission of developing a transparent and vibrant capital market, efficient and compliant insurance, NBFC and corporate sectors.
Published in The Express Tribune, February 17th, 2015.
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