ISMAIL DILAWAR

KARACHI: Federal and provincial investigation agencies, particularly National Accountability Court (NAB) and Federal Investigation Agency (FIA) are no more allowed to move against any person regulated by the Securities and Exchange Commission of Pakistan (SECP) without a reference from the apex regulator.

Also, no agency, bureau, authority or institution would be able to deal with any proceeding which is under consideration by the SECP. This the federal government has legislated upon on May 11 through amending Securities & Exchange Commission of Pakistan Act, 1997 (XLII of 1997).

“This came in the backdrop of a general fear among the brokers community of an action by any investigation agency,” said a market analyst, seeking anonymity.

FIA’s recent raids and the arrest of office-bearers of AKD Securities, he agreed, might be one of the instances haunting the brokers. “(By inducting this clause) they want to maintain the supremacy of SECP which is the concerned regulatory authority for capital market,” the market observer said.

The stock brokers, he said, had long been requesting for any such legislation that could put them under the ambit of SECP.

Friday, the Pakistan Stock Exchange (PSX) notified the TREC holders about the passage of Securities & Exchange Commission of Pakistan (Amendment) Act, 2016.

Titling “Inquiry, investigation and other proceedings in respect of regulated persons”, a new clause, Section 41B, has been inducted in the amended law.

The new section provides that: “Notwithstanding anything contained in any other law, including National Accountability Ordinance, 1999 (XVIII of 1999) and Federal Investigation Agency Act, 1974 (VIII of 1975) no action, inquiry, investigation or proceedings in respect of any regulated activity, regulated securities activity, transaction, process or permission granted under this Act or any administered legislation, shall be taken, initiated or conducted by any Federal or Provincial investigating agency, bureau, authority or institution by whatever name called without reference from the Commission”.

“No proceedings shall lie before any agency, bureau, authority or institution at the instance of any party to a matter which is or has been in issue before the Commission, in respect of a matter which is actually or has been or might or ought to have been a proper subject of complaint to the Commission under the administered legislation,” it adds.

“Provided that cases pending before any court having jurisdiction before coming into force of this Amendment Act, shall continue to be prosecuted and conducted without reference from the Commission.”

Muhammad Rafique Umer, general manager law and corporate affairs at PSX, said the bill would have to be passed by the Senate before its promulgation as an Amendment Act.

The new section, he said, was inserted with regard to “taking action by federal or provincial agencies in respect of any regulated securities’ activity, transaction etc”.