SECP denies mulling crackdown on companies

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Thursday dismissed electronic media reports claiming the corporate regulator was gearing up to mount a ‘search and seizure’ action against the companies.

“No crackdown of any sort is being planned or under is consideration of the commission,” the commission said in a statement. “It is also clarified the SECP does not regulate or enforce Income Tax Ordinance, 2001 or Benami Transactions (Prohibition) Act, 2017.”

The commission said its powers were restricted to offences provided in the SECP Act, 1997, and other administered legislation as provided in its schedule. The statement also said the SECP was taking all necessary steps to ensure beneficial regulation and growth of capital market and corporate sector in Pakistan.

The capital market is trapped in a downward spiral for many last months without any respite and on Thursday (July 18, 2019) the benchmark index lost 672 points to close around 32,309 points’ level, which is lowest since March 16, 2019.

The recently notified “SECP (Search and Seizure) Rules, 2019” are a requirement of law under section 31 of the SECP Act, 1997, which merely lays down strict procedures for use of

powers by the SECP’s investigation officers, the commission said.

Interestingly, after the media ran such story, these rules were removed from the Securities and Exchange Commission of Pakistan website. The regulator said,” It is also clarified that the SECP does not regulate or enforce Income Tax Ordinance, 2001 or Benami Transactions (Prohibition) Act, 2017.

The Securities and Exchange Commission of Pakistan’s powers are restricted to offences provided in the SECP Act, 1997, and other administered legislation as provided in its Schedule”. It is reiterated that these powers are restricted to investigations ordered by the commission under the Securities and Exchange Commission of Pakistan-administered legislation, the statement said.

“As wrongly reported in a section of the media no new powers have been bequeathed to the Securities and Exchange Commission of Pakistan. It is clarified the powers of search and seizure and forced entry have been part and parcel of the SECP Act, 1997, since the establishment of the Commission,” the statement asserted.

The regulator also stressed that recently notified rules were aimed at helping the commission to curb any potential misuse of authority by the investigation officers.

“The rules, inter alia, require investigation officers to first seek authorisation,

in writing, from the Commission, comprising of five commissioners for the purpose of search and seizure,” it said. Further, the commission added that in certain circumstances, the order from the relevant magistrate was also required.