SECP deploys modern gadgets for surveillance of Pakistan’s stock market

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has deployed various modern tools for surveillance of the Pakistan stock market.

This was disclosed by Commissioner Securities Market Division (SMD) Abdul Rehman Warraich in a workshop arranged for capacity building of Islamabad-based journalists.

He defined the stock exchange as a place for capital formation, financial inclusion, channeling savings, and diversifying investments. He gave detailed responses to queries on various functions of the stock market and explained the regulatory regime.

SECP Executive Director Mussarat Jabeen briefed the participants about various reforms initiated by the SECP to strengthen the capital and equity markets, especially the recent reform for safeguarding the interests of minority shareholders.

She talked about SECP’s measures to deepen the market and enable market growth through the digital taking on board the retail investors. She also told the participants on liquidity, leverage, volatility, holdings, redemptions, solvency risk, reinsurance and investment risk.

The participants were briefed on the trading, clearing, and settlement functions of the Pakistan Stock Exchange, the National Clearing Company and the Central Depository Company of Pakistan Limited.

The SECP officials also gave a detailed presentation on the digital online account opening process, the KYC framework, and the newly introduced Centralized Gateway Portal for retail investors across all asset classes, ie, the securities market, asset management companies, and insurance companies.

The new process required filling out one-time account opening forms, KYC, and CDD with standardized information and documents.

The market surveillance team briefed the participants about the SECP’s mandate with respect to the market surveillance function. Participants were informed about different types of market abuse, such as insider trading, market manipulation, etc, and briefed about various modern tools for surveillance that have been deployed at SECP and PSX.

Different triggers for the detection of market abuses, such as system-based alerts, referrals, complaints, etc., were explained to participants. Case studies were presented to participants to help them develop an understanding of market abuses, especially insider trading and market manipulation.

The participants were also told about various risk indicators, such as the index, liquidity, settlement-to-trade ratio, relative strength index, broker exposure, volume leaders in leverage, and those being overseen by the SECP.