Regulator challenges constitutional audit framework
Staff Report
ISLAMABAD: The Securities and Exchange Commission of Pakistan has triggered institutional alarm by issuing an extraordinary public rebuttal against Auditor General of Pakistan (AGP) findings, marking the first time a central regulatory body has openly challenged constitutional audit authority through a press release rather than established parliamentary channels.
SECP’s August 23 statement represents a calculated departure from institutional norms, directly confronting AGP observations about unlawful pay revisions and revenue deposit failures. The timing itself signals crisis management rather than routine clarification, with the regulator choosing public confrontation over established Departmental Accounts Committee (DAC) procedures.
The commission’s defense strategy reveals troubling institutional thinking. By invoking the SECP Act 1997 as a shield against federal oversight, the regulator essentially claims statutory immunity from standard government accountability mechanisms. SECP wrongly believes its own rules can override the Auditor General’s constitutional authority.
Most concerning is SECP’s attempt to reframe accountability structures. The press release emphasizes Policy Board oversight comprising federal secretaries and private sector experts, suggesting this internal mechanism suffices for public accountability. This logic dangerously undermines the principle that all public institutions remain subject to constitutional audit authority regardless of their governance structures.
The regulator’s complaint about “imbalanced media reporting” exposes another institutional failure. SECP admits providing responses to journalists that weren’t published, indicating inadequate media relations. Rather than addressing substantive audit concerns, the commission chose to blame media coverage patterns.
Business community leaders expressed alarm at the precedent. If SECP can publicly dismiss AGP findings based on statutory interpretation, every autonomous body will follow suit, warned an insurance veteran. This erodes the entire federal accountability framework, he added.
The procedural contradictions in SECP’s statement compound concerns. While denying receipt of DAC invitations, the commission simultaneously acknowledges that the matter will proceed to DAC review. The reference to July 2025 PAC decisions favoring SECP raises questions about why similar issues resurface if previously settled conclusively.
SECP’s market-driven justification for compensation packages reflects private sector thinking inappropriately applied to public institutions. The emphasis on “exceptional expertise” and “market competitiveness” suggests the regulator views itself as exempt from federal pay scale discipline, creating potential conflicts with broader government compensation policies.
The constitutional implications extend beyond SECP. By challenging AGP authority so directly, the market watchdog risks encouraging other statutory bodies to resist audit oversight. This could systematically weaken the constitutional audit framework designed to ensure public sector accountability.
The immediate impact affects public confidence in regulatory transparency. SECP oversees capital markets worth trillions of rupees, making institutional credibility paramount. Public confrontation with the constitutional audit authority damages its credibility precisely when market confidence requires strengthening.
The regulator’s promise to “share perspective before media reporting” rings hollow given their subsequent communication pattern. Despite repeated attempts by some reporters to know the SECP’s stance, the commission has maintained complete silence, contradicting its stated commitment to transparency and open communication.
This silence becomes particularly problematic when SECP simultaneously criticizes the media for “imbalanced reporting” while refusing to provide balanced perspectives when directly approached. The contradiction exposes institutional inconsistency between public relations rhetoric and actual media engagement practices.
SECP’s unprecedented rebuttal ultimately undermines both its own institutional standing and Pakistan’s broader accountability architecture, setting a dangerous precedent that threatens constitutional audit authority while demonstrating the very communication failures it publicly criticizes.
