PSX MD served notice for breach of employment contract

KARACHI: Richard Morin, managing director of the Pakistan Stock Exchange (PSX), has been served a show cause notice by a bourse’s committee, asking him to explain his simultaneous working with a Canadian wealth management company, sources said on Monday.

The sources said the human resource committee of the PSX asked Morin to explain the breach of employment contract, code of conduct and business ethics of the exchange as he was found working for another business concern, Montreal-based Archer Wealth Management. The stock exchange did not release any notice on the issue.

“The PSX board would take up the issue in the coming months,” a bourse’s member said, requesting anonymity.

Morin was appointed as the PSX’s head in November 2017 “following due process as required under the Securities Exchanges (Licensing and Operations) Regulations 2017, and in terms of Fit and Proper criteria,” the Securities and Exchange Commission of Pakistan then said.

Morin co-founded Montreal-based investment manager Landry Morin Inc. He has also headed Stock Exchange of Mauritius. He has also been vice president of National Bank Securities. He got BSc in economics degree from the University of Montreal and an MBA degree from McGill University.

A broker said PSX MD is facing sort of an inquiry and “yet the members were not officially informed.” “Nonetheless, PSX is a listed company and this is material information which should be made public,” the broker added.

When contacted by The News, Morin refused to make any comments. Another broker said the stock market has not witnessed any positive difference since the demutualisation in 2016 as none of the promises of new products, cross-listings, and technology transfer have been materialised as yet.

On Monday, PSX stock price stood at Rs15, which suggested that almost half of the share value has already been wiped off. In 2016, PSX sold 40 percent of its strategic shares to a Chinese-led consortium at Rs28/share.

Foreign investors were expected to bring in investment, experience, technological assistance and new products like options and futures after Morin’s appointment. “But all is still a dream,” a dealer lamented.

Brokers, who hold a 40 percent stake in the total issued capital of the PSX, had opposed appointment of Morin as the bourse’s chief. “Now, it seems their concerns were not unwarranted,” another dealer said. PSX’s 20 percent shares vest with the public.

Brokers complained that regulations are being tightened leaving no room for the traders/brokers to conduct the business and make money.

“The MD has failed even after 1.5 years of service to introduce any new product or take initiatives to increase investor base or increase market participation,” a broker said. “Best international practices have not been observed and as such impractical regulations are proposed to be introduced without considering depth of market and its appetite.”

Analysts said the market appears over-regulated and requires ease and above all a ‘focused’ head, who must possess local experience to identify and help brokerage industry and market participation grow. “Over-regulations without market depth and products are pushing the traders out of the market,” a trader said.