PSBA calls out SECP for denying fair trial rights in banking court

November 13, 2024 (MLN): The Pakistan Stock Brokers Association (PSBA) has called out the Securities and Exchange Commission of Pakistan (SECP) for filing references in the Banking Court without following proper procedures.

In a letter addressed to SECP Chairman Akif Saeed and Commissioner Abdul Rehman Warraich, PSBA highlighted a critical issue where respondents were not notified of charges against them nor given an opportunity to present their defense before the proceedings began.

PSBA pointed out that as a best practice, the SECP formally issues a Show Cause Notice to respondents, allowing them to understand the specific context of any non-compliance or investigations.

This procedure provides respondents with clarity regarding the alleged violations and gives them a fair opportunity to respond.

Consequently, disciplinary actions are carried out with transparency, adhering to procedural fairness and due protocols.

However, in these cases, the investigations carried out by the SECP overlooked essential procedural safeguards, the association said.

As a result, the respondents were left without a clear understanding of the context of the investigation, preventing them from effectively addressing the SECP's concerns in a specific and informed manner.

It is also important to note that the references were lacking:

1. Any report sent to the individual;
2. Framing any charge;
3. Providing any opportunity to be heard;
4. Any objective evidence (as in criminal cases, evidence must prove wrongdoing beyond a reasonable doubt, rather than relying solely on statistical inferences); and/or
5. Exploring/Exhausting SECP's avenues as it has its adjudication framework.

It said that the ongoing proceedings in the Banking Court have negatively affected the profiles and careers of the members, causing significant disruptions.

The requirement for respondents to appear in person in court multiple times (often for long durations) places an undue burden on their professional commitments.

This situation not only interferes with their responsibilities and daily operations but also undermines their confidence in the regulatory environment, it said.

The association emphasized that these actions violate the Securities Act of 2015 and the constitutional right to a fair trial, as guaranteed under Article 10-A of the Constitution of Pakistan.

In light of these concerns, PSBA has called for the withdrawal of the cases from the Banking Court and urged SECP to ensure a fair and transparent regulatory process to support the markets' confidence in the regulatory environment.

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