The Securities and Exchange Commission of Pakistan (SECP) has heightened its regulatory oversight of capital markets and businesses, targeting illegal financial practices while reinforcing investor confidence through technology-driven measures.
The SECP reported blocking 142 unauthorized digital lending applications and taking action against over 50 unregistered deposit-taking entities and fraudulent investment schemes. Complaints regarding these entities were referred to the Federal Investigation Agency (FIA), Pakistan Telecommunication Authority (PTA), State Bank of Pakistan (SBP), and Google for further steps.
To protect the public, the SECP signed a memorandum of understanding (MoU) with the FIA, enabling swift action against scams. Public warnings were issued, offending companies were flagged on the SECP website, and legal steps were initiated to dissolve non-compliant entities.
During a recent Commission meeting, SECP reaffirmed its commitment to transparency and investor protection. Key discussions centered on measures to combat illegal deposit-taking and financial fraud. Oversight efforts included reviews of mutual funds, insurance companies, and brokerage firms to ensure compliance and safeguard investor interests.
A joint inspection team from the Pakistan Stock Exchange, Central Depository Company, and National Clearing Company conducted risk-based inspections of 64 securities brokers, focusing on client asset segregation, margin collection, and pledged securities. Findings indicated no immediate risks, reflecting improved compliance in brokerage operations.
In the insurance sector, regulatory interventions led to Rs162 million in additional refunds to policyholders, further boosting public trust. SECP’s collaboration with public sector companies improved financial statement compliance, increasing filing ratios from 34% to 51%.
The SECP is adopting technology-driven supervisory models aligned with global standards, emphasizing early detection and intervention in high-risk scenarios to stabilize financial markets.
However, delays in legal enforcement remain a challenge, with 53 investigations and 30 criminal complaints currently under court stay orders. The SECP emphasized adherence to Standard Operating Procedures to expedite case resolutions.
A review of the mutual fund industry was concluded to mitigate risks and protect investors. Efforts included assessments of client asset segregation and profit distribution processes.
Increased scrutiny in the insurance sector targeted high-risk entities, ensuring fair treatment of policyholders and industry stability. Proactive measures, including blocking fraudulent apps, raising public awareness, and flagging non-compliant sponsors, form part of SECP’s broader strategy to secure the financial landscape.
Through comprehensive enforcement and regulatory actions, the SECP underscores its dedication to investor protection, market transparency, and bolstering trust in Pakistan’s financial sector.
