SECP Allegedly Financed Its International Conference by Raising Funds From Entities It Regulates

To promote its chairman and commissioners, the Securities and Exchange Commission of Pakistan (SECP) organized an international capital markets conference in Karachi last month. However, allegeldy the event was not financed from the regulator’s own budget, but by the very entities it supervises. Sources said the SECP asked the Pakistan Stock Exchange (PSX), National Clearing Company (NCCPL), Central Depository Company (CDC), Pakistan Mercantile Exchange (PMEX), and even a brokerage house to fund the regulator’s flagship event. It is a rare and troubling instance of a regulator soliciting money from its regulatees, raising the question: How can a watchdog enforce governance on institutions it financially leans on? On November 12, the SECP issued a press release proudly announcing the international conference. What the statement did not disclose was that the estimated cost, close to Rs. 20 million, was to be covered by frontline market institutions under SECP’s direct oversight. Expenses included a five-star venue in Karachi, hotel bookings, boarding and lodging for foreign and local guests, and travel for more than two dozen SECP officers from Islamabad. Multiple insiders confirmed that each institution was asked to contribute Rs. 4 million, effectively financing a regulator-led event marketed as an “international initiative.” Officials within these institutions said the pressure was unmistakable. Sources at PSX told this correspondent that the board initially refused to approve the funding request, citing budget constraints. However, the SECP allegedly used its supervisory influence to push the stock exchange into releasing the money. “The message was clear: refusal was not an option,” said one official familiar with the matter. A similar situation unfolded at PMEX. According to insiders, the commodities exchange informed SECP that it did not have funds available for such sponsorship. SECP then advised that the financing be arranged through a brokerage house instead. Soon after, Al Meezan Securities publicly announced on social media that it was sponsoring the capital markets conference, a move that underscored how regulated entities were pulled into funding their regulator’s event. Frontline market institutions also revealed that this is not the first time SECP has pressured its regulatees for event financing. “SECP regularly leans on us to fund its seminars, conferences, and outreach activities. It has become a pattern,” one official said, adding that such practices undermine the independence of market institutions and blur the lines between regulator and regulatee. SECP did not respond to queries from ProPakistani.