ISLAMABAD: The Securities Act 2015 will regulate the securities sector and provide protection to the investors through a risk management mechanism. Presently, Securities and Exchange Ordinance 1969 (SEO1969) regulates Securities market.
A report on the Securities Act 2015 finalized by the Senate Standing Committee on Finance and Revenue, adopted by the Upper House of the Parliament and available with this scribe describe that Securities and Exchange Commission of Pakistan (SECP), a regulator of Securities Market, felt that the existing law remained fundamentally incomplete, lacking a proper and logical structure and suffered from numerous inconsistencies and gaps.
There was a need that SEO 1969 either be repealed or replaced with a comprehensive modern and all encompassing piece of Securities law. Accordingly, SECP drafted the said act to effectively regulate the securities market.
The report stated that almost 15 important chapters related to safety and security of the interests of investors were made part of the said act to enhance confidence of the shareholders and stakeholders in the effectiveness of the market.
The report carries a series of special measures to secure the investors from heinous and unpleasant activities of influential market forces. These measures start from the grant of license for securities market to discipline of the licensed persons.
The report reveals some of the measures which include increased powers of the commission in relation to licensed persons, supervision and investigation into the market abuses in insider trading as well as accounts, capital requirements and audit of the companies intending to invest and doing business in the securities market.
Similarly, the said act also gave a specific and clear code for the conduct of regulated securities activities of the central depository companies, clearing houses as well as securities exchanges.
The Senate Standing Committee on Finance and Revenue submitted final report on a bill to amend and consolidate law for the regulation of the securities industry and the protection of investors in the Senate last Wednesday and the House adopted the said report unanimously.
Earlier, in the beginning of current month, the committee unanimously adopted the said bill to strengthen the regulator (SECP) to take action against malpractices in the securities market.
The objective of the Securities Bill 2015 is to remove the major shortcomings in Securities and Exchange Ordinance, 1969, because SEO 69 has no provision for system audit of stock exchanges; Commission intervention powers for investor protection and regulation for clearing houses etc.
It is pertinent to note here that at committee level, the MD Lahore Stock Exchange (LSE) requested the committee to bind the Securities and Exchange Commission of Pakistan (SECP) to exercise its powers and don’t let LSE and Islamabad Stock Exchange (ISE) on the mercy of the Karachi Stock Exchange (KSE).
