SECP suspends registration of KSE, LSE brokers

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has suspended the registration of two brokers of the Karachi Stock Exchange (KSE) and Lahore Stock Exchange (LSE) for engaging in acts which compromised their integrity, veracity and reputation.
These brokers were M/s Pak Meezan Securities (Private) Limited, a broker of KSE and M/s Reliance Capital (Private) Limited, broker of LSE. Both of their registration as brokers has been suspended for a period of six months under the 2001 Brokers and Agents Registration Rules.
The commission conducted a detailed exercise regarding the verification of net capital balance (NCB) certificates of all the registered brokers directly from 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 M/s Pak Meezan Securities (Private) Limited and M/s Reliance Capital (Private) Limited 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.
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.
The commission said that it is 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.