SECP comes down hard on brokerage houses. #Karachi #Pakistan #ZCS #KSE #SECP KARACHI: The Securities and Exchange Commission of Pakistan (SECP) has warned securities companies (brokerage houses) against violating certain applicable regulatory requirements, particularly those with regard to the segregation of clients’ assets, official sources said. According to General Regulations of the Karachi Stock Exchange, the brokers have to ensure that the assets belonging to their clients are kept separate from the assets of the brokers, the officials said. However, the SECP discovered that certain brokerage houses failed to segregate their clients’ assets. Brokerage houses, in order to protect their clients overlooked certain regulations, they said. “The local bourse has been a ‘big game’ in the last few years, attracting a huge amount of money from unidentified and somewhat questionable sources. Hence, a number of brokers offered out of the way favors to claim their due share in this influx of money,” a dealer said on the condition of anonymity. The SECP has also warned the brokers not to maintain the standardized account opening form, which contains particulars, including occupation of the account holder, the dealer said. Ahsan Mehanti at Arif Habib Corporation said that often the amendments in regulations and new requirements were not duly communicated with the brokers due to which shortcomings occurred. Money is pouring in the market from several sources both local and foreign but it happened all over the world and there is nothing wrong in it, he said. Officials said that the stock market had been the parking lot of funds in the last few years and money earned through various criminal acts, including ransom, smuggling, etc poured in the bourses, which was a safe haven and a mill to turn black into white. The stock market has been the favorite investment spot lately, attracting money from politicians, bureaucrats, ex-generals among others because once the money is in the market it cannot be pinned to anybody, the officials said. An official said that bourses provided the opportunity of making money that came from Source-A looked like it came from Source-B. In practice, criminals are trying to disguise the origins of money obtained through illegal activities so that it looks like it was obtained from legal sources. Otherwise, they cannot use the money because it would connect them to the criminal activity and the law-enforcement officials would seize it, they added.
Posted on: Wed, 26 Feb 2014 06:55:10 +0000
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