On-site surveys of 105 stockbrokers carried out: SECP – Business & Finance

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) conducted on-site inspections/investigations of 105 stockbrokers and issued warnings to 35 brokerage firms in 2020-21.

SECP data revealed that on-site supervision is the key tool to monitor brokers’ activities to ensure regulatory compliance. Inspection and investigation of brokers are conducted regularly based on indicators of risk assessment criteria including financial strength, compliance level and trading performance. A significant number of inspections/investigations were conducted during the year resulting in compliance directives or referrals to adjudication depending on the nature of the regulatory non-compliance.

The SECP report found that off-site review of financial statements and other statutory filings is the primary tool for oversight of the corporate sector.

Electronic/online brokers: the SECP decides to introduce the concept

On-site inspections or investigations are conducted if required by the desk review, based on a recommendation from the Registrar or a complaint from an eligible shareholder.

Major nonconformities or irregularities observed during offsite or onsite reviews are referred for decision while warning/compliance directives are issued for minor nonconformities by the respective oversight functions.

Going forward, over the coming year, the Commission foresees rigorous and well-synchronized enforcement, supported by off-site supervision, on-site inspections, investigations and adjudication functions.

Priority areas continue to target transparent disclosure, informed decision-making, accountability and the protection of minority shareholders and the general public. AML/CFT compliance must remain a key priority.

Copyright Business Recorder, 2022

Dolores W. Simon