The Securities and Exchange Commission of Pakistan (SECP) has established a task force to identify weaknesses and gaps in the current protection mechanism for the shareholders of the companies and suggest ways and means to overcome these through shareholder activism. The decision has come in the light of the prevalent international practices. In Malaysia, Minority Shareholder Watchdog Group (MSWG) or Badan Pengawas Pemegang Saham Minoriti Berhad, was set up in 2000 as a government initiative to be part of a broader capital market framework to bring about awareness and help protect the interests of minority shareholders through shareholder activism. The MSWG is a professional body licensed under the 2007 Capital Markets and Services Act. It is a self-governing and non-profit body, funded predominantly by the Capital Market Development. It is an important channel for market discipline, encouraging good governance among public listed companies with the objective of raisi...

In November the SECP’s Corporatization and Compliance Department took 82 enforcement actions against various corporate entities and penalties amounting to thousands of rupees were imposed on five of them.  The department issued 45 show cause notices and conducted 31 hearings for various violations of the provisions of the 1984 Companies Ordinance, ranging from late filing of annual accounts, non-filing of accounts to non-holding of AGMs and faulty audit of cost accounts. Six orders were issued against five companies: Pakistan Electrical & Electronics Merchant Association (Sections 184, 242 read with 476),  Fahim Nanji & De Souza (Sections 92, 93, 172  read with 476), Chemi Multfabrics Limited (Sections 142, 184 read with 476), United Brands Limited (Section 184 read with 476) and Grand Leisure Corporation Limited (Section 184 read with Section 476).  In addition, the department received seven complaints during the month and four of them were ...

ISLAMABAD: Integrity, transparency and fairness in the capital markets are critical for protection of investors and enhancing their confidence. However, market abuses and unfair trading practices such as front-running/insider trading negatively affects this basic essence of the markets.  Front-running, a form of insider trading arises when a person engaged in processing or making investment decision/order in his official capacity uses that information for his personal benefit directly or indirectly.                                                                                     This undesirable activity usually takes place in institutions active in the capital markets such as brokerage houses, mutual funds, financial institutions and entities having large investments in ...