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SECP clarifies missing data issue

KARACHI: The chairman of the Securities and Exchange Commission of Pakistan (SECP) has clarified position of the Commission about the data related to the March 2005 stock market crash and he also pointed out correspondence with the Karachi Stock Exchange (KSE) management, indicating inability of data holding by the IT system of the KSE.

The Commission termed the news item regarding the disappearance of data appearing in a section of the press “misleading and incorrect.”

According to a press release, the SECP said “it has been incorrectly reported that the data of bid and offer pertaining to the March 2005 crash was available with the SECP prior to January 2006 and that it had disappeared from the records of the SECP thereafter.”

Furthermore, in December 14, 20006 statement before the National Assembly Standing Committee on Finance and Revenue, Dr Tariq Hasan, former chairman of the SECP, claimed that the compete trading data for March 2005 period was available with the SECP before he left. The allegation made in the media and the claim made by Dr Tariq are totally incorrect, without any factual basis, hence refuted, the SECP statement said.

The statement said an abnormal level of activity was witnessed at the KSE in March 2005 and thereafter the KSE was directed by the SECP to provide trading data, including order data, bid and offer, vide its correspondence dated April 11, 2005 and April 19, 2005 for the months of January, February, March and April of 2005. However, the KSE only provided data relating to executed trades whereas the data containing bid and offer was never provided to the SECP by the KSE.

The non-maintenance of order data by the KSE was also highlighted in the report by the task force which had been constituted to investigate factors with had led to the March 2005 sock market crash. Pursuant to the recommendation of the task force to conduct a forensic investigation, the SECP once again in August 2005 by virtue of its powers under section 21 of the Securities and Exchange Ordinance of 1969 directed the KSE to provide complete trading record of trading activities at the KSE for the period January-April, 2005. staff report

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