KARACHI: Karachi Stock Exchange (KSE) has decided to defray initial claims of investors defrauded by a brokerage house, its chief said.
Chairman KSE board of directors Muneer Kamal, later last week, briefed the Chairman Securities and Exchange Commission of Pakistan (SECP) Zafar Hijazi on the process of claims settlement with regards to ACE Securities and informed him that external auditors had almost completed the claim verification process.
“Once the process is complete, initial payments from KSE’s own Investor Protection Fund (IPF) would be made with any further amounts (to be) disbursed after disposal of (the) broker’s assets,” Kamal said.
The KSE suspended the trading of ACE Securities Limited (ACE) in April this year after the brokerage house was found defaulted on payments.
Hijazi advised the KSE board to take all possible measures to ensure full settlement of small investors’ authentic claims on urgent basis.
“In this regard if current regulations or trust deed of IPF requires revisiting that should be done without delay,” he said. “The SECP will support any positive changes that are in public interest.”
SECP head also advised the board to expedite submitting its proposal for further strengthening the IPF with increased contribution to make it sustainable over time.
He said the SECP is committed to protecting equity investors from all elements who cheat them, adding that the commission would leave no stone unturned to bring the cheaters to justice. “The SECP will not allow brokers to get away. We’re already coordinating with law enforcement agencies to bring wrong doers to the task,” he said.
Hijazi further said the SECP will not allow sponsors to simply delist their companies after having investment from public.
“(The commission) is planning a major exercise whereby the sponsors of such defaulting companies will be made answerable,” he
added.
He talked about a proposal, which will require companies to keep a minimum float of their shares at all times as is the case in many countries across the world. He asked the KSE management to enforce compliance of regulations on all capital market’s participants, strengthen the monitoring and reporting regime to preempt crisis and work for investor protection and facilitation of companies complying with the code of corporate governance.
The SECP chairman reassured the exchange of its full support and cooperation in bringing market reforms in line with the provisions of the Securities Act, 2015.