The Pakistan Securities and Exchange Commission

The Pakistan Securities and Exchange Commission (SECP) concluded a reform agenda for capital markets following a series of meetings with market participants, at the request of stakeholders. The SECP chairman and senior executives met with the Stock Brokers Association on Friday to vouch for the measures adopted to ease business on the stock exchange.

The SECP chairman said

The reforms carried out by the top regulators informed the SBA with the aim of stabilizing the market, attracting liquidity, promoting business ease, revitalizing market development and restoring investor confidence. The reform agenda was concluded after taking into account the comments provided by other market participants, including senior management of large brokers, major corporations and financial institutions, and market infrastructure institutions.

The SECP introduced a Centralized Know-Your-Customer Organization (CKO) system to facilitate investors and ensure process transparency and efficiency, but brokers raised objections to the CKO system. While addressing various issues related to biometric authentication of stock market investors under CKO, regulators have placed the responsibility of biometric authentication on securities brokers.

These brokers asked the SECP to introduce a central database for biometrics to be conducted by the National Clearing Company (NCCPL) in Pakistan. NCCPL has offices in the stock exchange building and biometric authentication should be done in one place instead of independently checking by each broker,” said a PSX stock broker in Islamabad.

To increase the trading capacity of market participants

The SECP has approved an amendment to the NCCPL regulations: “Stop 10% additional margin collected from brokers and 10pc additional haircuts applied to marginable securities by NCCPL. Slabs for liquidity margins have been revised, and now apply only to bulk exposures in brokers, while credit ratings have been added during implementation of modified slabs to manage risk. First of all, SECP has approved Mura Baja stock financing rules for leverage financing of Sharia-compliant securities.

Amendments to the PSX regulations also addressed complaints from securities brokers regarding empty sales in the delivery futures contract market. The SECP also allowed the 'unblocking and commitment of margin financing securities' to meet the NCCPL margin requirements, and the requirement of the three-party agreement on margin financing has also been removed.

SECP responds to the needs of the corporate sector

Taking into account the transition from a rule-based corporate governance framework to a combination of mandatory and recommended practices, publicly traded companies (Code of Corporate Governance) regulations to accommodate international best practices and facilitate business operations, 2019. The SECP also decided that the government would exempt IFRS 16 from the government, as well as IFRS 16, for a limited period of three years – June 30, 2021, as well as debts from power supply chain companies.

To all companies with power purchase contracts before January 1 This exemption was made in light of the concerns expressed by the Company in relation to the material restrictions on the Company's applicability. At the same time, the Commission also took two steps to define a 'minimum brokerage commission committee' and the release of PSX shares belonging to a broker that could elicit strong reactions of some brokers, while other brokers are expected to support it.

The SECP argues that setting minimum commissions on stock selling and buying encourages market development and supports the commercial viability of the brokerage industry, while some brokers challenge the concept of competition and free market.

Steel mill in Pakistan

Nine (local time) accounting courts were arrested nine years later in a corruption case involving a former steel mill in Pakistan and 4.1 billion rupees. Former directors and executive directors, Moin Aftab Shaikh and Sameen Asghar, respectively, are reported to have misused their official authority and embezzled 19.4 billion rupees in raw material imports. Judge Pedro Reed Anwar Kazi of the Court of Accountability -IV convicted him after recording evidence and final arguments in prosecution and defense.

The judge noted that the prosecution failed to substantiate the claims made by the two former PSM officials. The court expelled them from all charges, bailed them and ordered the return of the guarantor. NAB has not proved prosecution of two former civil servants, even after nine years. The lawsuit against another suspect, Capt Rashid Abro, from M / s Noble Resources Singapore was fired from the case on May 22, 2013.

Advocates Shaukat Hayat and Khawaja Naveed Ahmed represented the defendants and Niaz Husain Mirani represented NAB. Initially, the Federal Investigation Agency began investigating allegations of fraud. In 2009, the Supreme Court initiated the Sumomoto litigation process for PSM affairs and transferred the investigation to NAB.

According to the prosecution, PSM executives have procured coke coal through a five-year long-term contract over the past 30 years, and prices have been adjusted according to average growth and decay rates for each subsequent contract year.

Glennies Creek Coke coal prices

Shipboard freight (FOB) prices for cargo shipped during each contract year have been adjusted from April of that year. Prosecutors claimed that PSM procured coke coal from four foreign shippers in the 2008-09 fiscal year: Australia's Anglo Coal, M / s West Farmers, M / s Teck Coal, Canada and M / s Vales. Former PSM Chairman Shake held a meeting on November 5, 2008 and said that a committee led by Managing Director Aghar at the time negotiated with foreign suppliers to lower raw material prices. Falling prices in the international market.

In addition, at a meeting on November 26, 2008, the PSM Board of Directors (BoD) announced that it has issued guidelines for the formation of a High Power Commission to negotiate the price of raw materials or cargo with foreign suppliers and shipping companies by offering discounts corresponding to the difference.

At the current rate

The prosecution said the board's instructions were not fulfilled by Chairman Shaikh and Asghar, which caused PSM to suffer huge losses as steel prices declined in the international market, but PSM must procure raw materials. Fixed rate on April 1, 2008, when price reached its peak. PSM received nine coal shipments in fiscal year 2008-09, and a forensic audit of the sawmill's financial issues showed that international coal prices during this period were $ 125.83 per ton and $ 128 USD. The two officials did not negotiate coal prices, resulting in a loss of 28 million rupees.

Since the POD ordered negotiations to lower the price on November 26, 2008, PSM only initiated three shipments out of nine coal shipments, prosecutors added that an international contract for two shipments was made two days before November 11. After this date, in 2008, where four shipments were made after April 1, 2009, when the applicable price was paid by PSM, 2008 was lower than the price paid for three shipments.

As a result, PSM lost 2.2 billion rupees

NAB noted that the accused did not form a high power commission to negotiate international import prices with suppliers and shippers under the direction of the board of directors, resulting in an adjustment loss of $ 24.762m. All accused accused of misusing their official authority and position, gaining excessive profits for themselves, and insisting that they did not deliberately exercise their power to prevent excessive gains or favors or translations to foreign suppliers.

However, all defendants with a common goal in bad luck, unpleasant motives and common goals, common sense and cooperation are illegal, illegal, fraudulent, deceptively prolonging false profits to suppliers and corresponding losses to PSM under the adjustment of Rs4 Caused.

19.2 billion They were accused of committing crimes against corruption and corruption practices that could be punished under section 10 (a) of the National Liability Act 1999.
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