Legal regime on market manipulation in Pakistan stock market: an evaluation from shariah perspective

Tahir, Anees and Othman, Ahmad Azam and Mohd. Sulaiman, Aiman @ Nariman (2023) Legal regime on market manipulation in Pakistan stock market: an evaluation from shariah perspective. Law and Social Policy, 5 (1). pp. 1-20. ISSN 2220-7627 E-ISSN 2409-1200

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Abstract

Market manipulation is recognized as a significant threat to the integrity of the capital markets around the globe. There are instances of abusive practices via market manipulation in the Pakistani stock market. The Securities and Exchange Ordinance 1969, The Securities Act 2015, and the Securities Brokers (Licensing and Operations) Regulations 2016 contain many provisions that prohibit market manipulation and hold it a civil and criminal offense. The Securities and Exchange Commission of Pakistan (SECP), as apex regulator is constantly engaged in curbing market manipulation practices through its enforcement regime. In the last two decades, it has taken action against the brokerage houses involved in market manipulation and has imposed financial penalties on the brokers involved in abusive manipulative practices. This article seeks to explore the common forms of market manipulation in Pakistan. It explains and examines the legal regime on market manipulation in Pakistan and analyzes the law and practices from the perspectives of Shariah. The methodology used in the study is the qualitative study by way of a legal doctrinal approach where rules and regulations and reports of enforcement actions are analyzed. The article clarifies the enforcement actions on market manipulation in Pakistan with a view to establishing the application of Shariah principles and the extent of SECP’s use of its current enforcement powers. The study concludes that the legal regime on market manipulation is in line with the rulings of Islamic law as well as the objectives of Shariah. The SECP does not fully exercise its authority to look into and bring charges against manipulative practices and effectively punish manipulators. In very rare cases, SECP, as regulator has invoked criminal liability against such manipulators. Very meagre penalties have been imposed which are not effective in curbing market abuses.

Item Type:	Article (Journal)
Uncontrolled Keywords:	Market Manipulation, Shariah, Market Abuse, Enforcement Regime.
Subjects:	K Law > K Law (General) K Law > K559 Comparative Law K Law > KBP Islamic Law
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Ahmad Ibrahim Kulliyyah of Laws Ahmad Ibrahim Kulliyyah of Laws > Department of Civil Law Ahmad Ibrahim Kulliyyah of Laws > Department of Islamic Law
Depositing User:	Prof Aiman Nariman Mohd-Sulaiman
Date Deposited:	13 Jan 2025 13:10
Last Modified:	13 Jan 2025 13:10
URI:	http://irep.iium.edu.my/id/eprint/117867

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