Daily Times

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has ordered probe against several securities brokers for market manipulation through misleading trading activity.

The SECP chairman has directed the SECP officials to address this issue through aggressive policy measures and ruthless enforcement under Section 139 of the 2015 Securities Act.

The battle lines between the apex regulator of the stock market and the market manipulators have now been drawn.

For a number of years, some market manipulators have been defrauding the public through deceptive trading practices. One such practice is entering bids and offers with the prior intent of cancelling them before trade execution, commonly known as spoofing. Another such practice is entering multiple bids or offers to create the appearance of false market activity.

The actions of these manipulators are responsible for creating large movements in prices of securities that cannot be justified by any economic logic. Such manipulation undermines investor confidence and distorts the perception of stock market as a rigged casino, which is clearly prohibited under the Part IX of the 2015 Securities Act.

Three months ago, the SECP had tasked the stock market surveillance team with analyzing index movement trends to identify those involved in market manipulation through deceptive activity. Detailed analysis of KSE-100 index movements and order placements during the period has highlighted that some securities brokers were most prominent in deceptive trading.

These securities brokers deliberately interfered with the workings of the market to defraud investors. They placed particularly large false buy and sell orders and created artificial market activity. During this time, significant volatility was observed in the prices of relevant securities.

Separately, the SECP conducted an investor awareness session for the employees of the National Highway Authority (NHA) at their office in Islamabad.

The session was conducted by the officials of Investor Education and International Relations Department.

The SECP officials steered a two-hours interactive session with NHA employees. In the earlier part of the session the discussion focused on the SECP’s role as the apex regulator of non-banking financial sector and its vision for protection of investors. Subsequently, a detailed interactive discussion focused on the need for savings and investments, mutual funds and voluntary pension system and some do’s and don’ts for investors etc. The participants were also informed about the salient features of Jamapunji web portal, the SECP’s value added SMS services and service desk facility. The seminar was attended by large number of employees who keenly enquired about various aspects of mutual funds and voluntary pension systems.