CCP to continue investigations in floor fixing

[Naveed Yaseen]

ISLAMABAD (December 12 2008): The removal of floor from the stock exchanges with effect from December 15, 2008 would not bar the Competition Commission of Pakistan (CCP) from investigating the imposition of floor on stock exchanges. Well placed sources in the CCP told Business Recorder on Thursday that the commission would continue to conduct investigation against the exchanges under section 4 of the Competition Ordinance 2007.

The investigation would not end even if the exchanges remove floor from December 15, as the CCP is investigating the imposition of floor and not its removal from a specific date.

The CCP has alleged that the exchanges have made an anomaly by imposition of floor at the stock exchanges. The removal of floor is directly related to the regulator ie Securities and Exchanges Commission of Pakistan (SECP). On the other hand, the CCP has never given any kind of directive to the exchanges to lift the floor. As the CCP is precisely investigating the imposition of floor, the current proceedings will continue till the exchanges respond to the show cause notices during hearing.

The CCP had issued show cause notices to exchanges for imposition of floor on their respective exchanges. The commission has alleged that imposition of floor is an "anti-market measure," which has restricted the exit and floor choice to investors.

It only helped few players of the exchange, which is a discriminatory step. It seemed that competition principles have been violated by the exchanges and level playing field has not been provided to all the players in the exchanges. Senior CCP officials were of the view that the imposition of floor reflected that the market dimensions have been seriously compromised.

http://www.brecorder.com/index.php?id=850906