ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has suspended the registration of Pak Meezan Securities Private Limited, a broker of KSE, and Reliance Capital Private Limited, a broker of LSE as brokers for a period of six months under the 2001 Brokers and Agents Registration Rules.
A statement issued by the Commission here Wednesday said that SECP was vigorously pursuing its vision of enforcing securities’ laws and accountability of non-compliant regulated entities to create a compliant corporate culture and continued its efforts to attain zero tolerance for protection of investors’ rights.
The SECP conducted a detailed exercise regarding the verification of net capital balance (NCB) certificates of all the registered brokers directly from the auditors.
The NCB of the broker determines its capital adequacy to trade in the market, and exposure of the broker in the stock market should not exceed the number of times of its attributed NCB.
In this perspective, the auditors of Pak Meezan Securities (Private) Limited, a broker of KSE, and Reliance Capital (Private) Limited, a broker of LSE, refused to verify the authenticity of NCB certificates submitted by these brokers to the SECP.
Subsequently, an enforcement action was initiated against the two brokers for submitting fake information to the SECP. It was established that the brokers were engaged in such an act that compromised their integrity, veracity and reputation.
Therefore, the SECP suspended their registration as brokers for a period of six months under the 2001 Brokers and Agents Registration Rules.
Through enforcement actions, the SECP has reassured the investors that as an independent and robust regulator, it will provide a level-playing field to investors, and violators will be taken to task.
