SECP’s regulatory powers reaffirmed by Islamabad High Court

May 14, 2025 (MLN): The Securities and Exchange Commission of Pakistan (SECP) has welcomed the judgment of the Honourable Islamabad High Court, which has reaffirmed the Commission’s regulatory authority to conduct investigations under the Securities Act, 2015.

The judgment was issued in response to a writ petition that challenged the SECP’s investigation proceedings initiated under Section 139 of the Securities Act, 2015.

The case involved allegations of market manipulation related to trading in the shares of a listed company, where the share price had increased by around 236% between December 13, 2013, and October 4, 2016.

Despite receiving lawful notices to appear before the SECP’s investigation team, the petitioners did not comply and instead approached the High Court for relief.

The Court dismissed the petition, ruling that the SECP was acting within its legislative framework and emphasizing the importance of such investigations in maintaining investor trust and ensuring market integrity.

The Court noted that the SECP’s notices were lawful and specific, and did not represent final or adverse decisions. Instead, they were intended to obtain clarifications.

The Court further stated that halting investigations at this stage would hinder the SECP’s ability to fulfill its statutory responsibilities, as per the press release issued today.

It was also observed that the SECP’s powers under Sections 137 and 139 are procedural, can be applied retrospectively, and do not infringe Article 12 of the Constitution.

Additionally, the constitutional safeguard against self-incrimination under Article 13(1)(b) does not apply in this context, as the SECP’s request for information does not equate to forcing testimony.

The SECP considers this judgment a strong endorsement of its mandate to investigate market abuses and uphold transparency in the capital markets.

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