A high-level meeting of the Securities and Exchange Commission of Pakistan (SECP) revealed that a huge backlog of over two thousand pending court cases is severely weakening the institution, causing significant delays in the implementation of its orders and an extremely low recovery rate of penalties.
To address this issue, Prime Minister Muhammad Shehbaz Sharif today constituted a special committee headed by Federal Minister for Law and Justice Azam Nazeer Tarar, tasked with preparing recommendations to introduce comprehensive regulatory reforms and strengthen the commission’s enforcement capabilities.
During the committee’s inaugural meeting, SECP Chairman Dr. Kabir Ahmed Siddiqui highlighted the severity of the challenge, proposing the establishment of special tribunals to ensure prompt decisions on pending cases. He also suggested a fundamental shift in approach, advocating for the adoption of a civil penalty system for capital market violations, drawing from international practices, particularly the British model, to replace the current criminal proceedings.
Federal Law Minister Azam Nazeer Tarar emphasized that institutional improvement is crucial for the successful implementation of any regulatory law. He directed Dr. Siddiqui to lead the complete digitization of the SECP’s regulatory framework to prevent forgery and fraud during company filings, a move that could also reduce the number of cases entering the judicial system.
The Commission briefed the committee on its ongoing efforts, such as the electronic transfer of shares through the Central Depository System, aimed at enhancing transparency and reducing paper-based corruption. The meeting concluded with a consensus on the need to strengthen the SECP’s enforcement powers through new legislation and to decriminalize certain offenses in favor of civil penalties.
The Federal Minister has directed the SECP to present a comprehensive reform plan at the next meeting, including detailed proposals for establishing tribunals, a new recovery system, necessary legal amendments, and measures to enhance institutional efficiency. Other distinguished members of the committee include Federal Cabinet Secretary Kamran Yousaf, Finance Secretary Imdad Ullah Bosal, Law and Justice Secretary Raja Naeem, and Competition Commission of Pakistan Chairman Farid Ahmed Tarar.