recorder report

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has decided to take action against those persons who regularly float opinions regarding stock market performance at social media.

This has been stated by Yasir Manzoor, head of Market Surveillance, Supervision & Enforcement Department while speaking at a workshop on insider trading and market manipulation held at the SECP head office, here on Tuesday.

The Securities and Exchange Commission of Pakistan (SECP) organized an interactive workshop for media professionals on insider trading and market manipulation.

In the workshop held at the SECP head office on Tuesday, senior officials from the Surveillance, Supervision & Enforcement Department of the SECP briefed journalists on various types of market abuse as well as on techniques to detect and deal with such manipulations.

Yasir Manzoor, head of Market Surveillance, Supervision & Enforcement Department informed the participants that the SECP has taken serious notice of the brokerage houses involved in placement and cancellation of orders showing misleading appearance in the market (termed as spoofing), thereby interfering with free and fair market. He said that the SECP has issued prohibitory orders to brokers involved in generating artificial trading activities. A number of investigation initiated in the matter under Section 139 of the Securities Act, 2015 read with all enabling provisions of SEC Act, 1997.

It was informed that during the current year the SECP has filed 7 criminal complaints for market abuses that include both insider trading and market manipulation. Moreover, two criminal complaints have been filed wherein the employees of the banks were involved in front running the banks’ trading activity.

The media persons were also briefed on recent actions taken by the SECP for the development of capital market.

Yasir Manzoor further said, “Behaving like stock market ‘gurus’ and suggesting people regarding investments and disinvestments is illegal as this too is a form of manipulation called inducement, which is a crime under the Securities Act 2015.”

Manzoor said among various kinds of market manipulation includes wash trade, pump & dump, spoofing and false statements.

“Among the latest form of market manipulation is giving false statement and this is mainly through social media. The SECP was trying to keep an eye at such activity too and a list of 33 such links and pages have been forwarded to the FIA,” he maintained.

He said that there is an internationally recognised procedure for individuals to become certified analysts, but such unregulated activities could defraud people of their investments.

Manzoor said that it is the duty of the regulator to contain market manipulation and protect the investors.

“It is also important because whenever there is market crash or when large number of investors face losses, everybody even media is criticising the regulator for not containing the market manipulators,” he said.

Out of this list, eight such pages have become non-functional, but due to widespread use of mobile phone based social media apps, tracing all such groups seem to be beyond the capacity of the SECP.

Yasir Manzoor also highlighted that the SECP has taken serious notice of the brokerage houses involved in placement and cancellation of orders showing misleading appearance in the market.

Such kind of activity is termed as ‘spoofing’ internationally, which interferes with free and fair market.

The SECP has issued notices to three such brokers involved in generating artificial trading activities.

To contain market manipulation, the SECP has filed 7 criminal complaints in the current year against market abuses that includes insider trading, and two criminal complaints have been filed against senior employees of two banks who were involved booking profits through insider trading.

Meanwhile, Chairman SECP Zafar Hijazi said that the Commission has a zero tolerance policy against market manipulation.

“We cannot control all manipulations – it cannot be controlled anywhere in the world but we can reduce it and discourage brokers and those in authority to misuse the law,” he added.

To a query about the SECP member for joint investigation team, he said, “We are considering seven to eight names for nomination of the one as the SECP member for the joint investigation team to be constituted on the orders of the Supreme Court. We will finalise the name by coming Wednesday or Thursday.”