SECP or­ders study of events of 2008 stock mar­ket crash

The Pak Banker - - Front Page -


The Se­cu­ri­ties and Ex­change Com­mis­sion of Pak­istan (SECP) has or­dered an in­de­pen­dent study to an­a­lyze the role of Stock Ex­changes as well as the SECP in the 2008 stock mar­ket crises.

An in­de­pen­dent con­sul­tant Shamim Ahmed has been hired in view of main­tain­ing trans­parency in the study re­port that will an­a­lyze the role the reg­u­la­tor and man­age­ment of stock ex­changes and other share­hold­ers.

The study of mar­ket crises en­tail­ing long term neg­a­tive im­pact for the mar­ket needs to be car­ried out for help­ing SECP in its pol­icy for­mu­la­tion re­gard­ing en­sur­ing ad­e­quate lev­els of trans­parency and gen­eral developments of the cap­i­tal mar­kets of Pak­istan.

Ad­dress­ing a press con­fer­ence here on Fri­day, the SECP Spokesman Im­ran Ghaz­navi an­nounced that the apex reg­u­la­tor of stock mar­kets has hired the ser­vices of Shamim Ahmed Khan for an­a­lyz­ing the is­sue in greater de­tail.

He said Shamim Ahmed will pre­pare a re­port on the back­ground, im­pact and rec­om­men­da­tions to avoid fu­ture re­cur­rence of the 2008 stock mar­ket crises in Pak­istan. He will iden­tify the fac­tors lead­ing to is­sues ob­served in the Pak­istani se­cu­ri­ties mar­ket in 2008 and an­a­lyze the cor­re­la­tion of mar­ket move­ment with trends in the global mar­ket.

The study will also eval­u­ate the ra­tio­nal for plac­ing a floor on the share prices of listed se­cu­ri­ties w.e.f. Au­gust 27, 2008 (the Floor) in terms of Force Ma­jeure Reg­u­la­tions of the Reg­u­la­tions Gov­ern­ing Risk Man­age­ment for Karachi Stock Ex­change (KSE), Lahore Stock Ex­change (LSE) and Is­lam­abad Stock Ex­change (ISE) re­spec­tively, the spokesman said.

He went on to say that it will also an­a­lyze the role of SECP in the de­ci­sion to im­pose the floor and the sub­se­quently re­move the Floor on De­cem­ber 15, 2008.

The spokesman said Shamim will also present the re­view of the im­po­si­tion of the Floor on the share prices in the mar­ket and on the mar­ket par­tic­i­pants and share­hold­ers and de­ter­mine the ex­tent to which any mar­ket par­tic­i­pant ben­e­fited or was dis­ad­van­taged by the im­po­si­tion of Floor as the case may be.

He will ex­am­ine the events which took place dur­ing the im­po­si­tion of the Floor, and the sub­se­quent mea­sures taken to bring reg­u­la­tory and op­er­a­tional re­forms for en­hanc­ing trans­parency and in­vestor pro­tec­tion. He will also ex­am­ine whether the Cen­tral De­pos­i­tory Com­pany (CDC) played the role of a front­line reg­u­la­tory of the de­pos­i­tory sys­tem.

Shamim Ahmed Khan has served as Chair­man SECP dur­ing April 1997 to March 2000. The study will help SECP in as­sess­ing how our mar­kets are cur­rently poised in com­par­i­son to the year 2008 and in iden­ti­fy­ing ar­eas which re­quire our spe­cial fo­cus of reg­u­la­tor.

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