SECP to probe ‘artificial crash’ of 20,000 points at PSX by brokers

2026-02-26 - 07:53

ISLAMABAD – The Securities and Exchange Commission of Pakistan (SECP) has decided to initiate an investigation into the sharp downturn at the Pakistan Stock Exchange (PSX), which has seen a loss of over 20,000 points since the transition to the T+1 settlement cycle earlier this month. The move comes after accusations surfaced that brokers may have colluded to artificially crash the market following the implementation of the new settlement system. The PSX has faced a dramatic plunge in its value since February 9, when the T+1 cycle was officially introduced, raising concerns among regulators and market participants. Reports said brokers and investors who previously made substantial earnings from the interest generated under the old T+2 system have seen their profits vanish with the switch to T+1, fueling suspicions that the downturn may be orchestrated. It is recalled that the transition had been implemented under the guidance of the Securities and Exchange Commission of Pakistan (SECP), through close collaboration among Pakistan Stock Exchange (PSX), National Clearing Company of Pakistan Limited (NCCPL), Central Depository Company (CDC), Pakistan Stock Brokers Association (PSBA), State Bank of Pakistan (SBP), Pakistan Banks Association (PBA), Mutual Fund Association of Pakistan (MUFAP), securities brokers, custodian clearing members, asset management companies, settling banks, E-Clear and other non-broker clearing members. The transition aligned Pakistan’s Capital Market with leading markets such as the United States, Canada, Mexico, Argentina, Jamaica, and China, which have already adopted shorter settlement cycles. Europe, the UK and Switzerland are set to follow by 2027. By moving early, Pakistan positions itself ahead of several advanced markets and demonstrates its commitment to modernization and investor protection. “The transition to the T+1 settlement cycle brings important advantages for Pakistan’s capital market. It enables faster access to funds and securities, improving liquidity, while reducing settlement and counterparty risk through shorter exposure periods. Quicker trade finalization enhances efficiency and the reform strengthens investor confidence, particularly among institutional and foreign investors. Together, these benefits support a stronger and more resilient market aligned with global best practices,” read official press release.