ISLAMABAD: The Competition Commission of Pakistan (CCP) has recently taken a strong stance against the use of the term “Big Four” in commercial agreements for appointing firms for assurance or financial services.
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The “Big Four” refers to the four major firms that provide assurance, consulting, financial advisory, risk management, and tax services both globally and locally. The CCP made this observation while reviewing applications from MNT Halan Pak B.V. and Advans S.A. SICAR. Both applicants sought exemptions from certain restrictive clauses in their agreements with third parties, using the term “Big Four” to designate financial service providers.
The CCP clarified that the selection process for financial or assurance services should not be confined to the “Big Four” in agreements. The use of any term or condition that restricts open and fair competition in the market is not permissible under Competition Law. Consequently, the CCP issued directives stating that the selection process for these services should remain open to all qualified firms, as limiting it undermines fair competition and distorts the competitive landscape.
Currently, the Institute of Chartered Accountants of Pakistan (ICAP) maintains a list of 130 CA firms with satisfactory Quality Control Review (QCR) ratings. The State Bank of Pakistan (SBP) has a panel of 46 auditors categorized into three groups under Section 35(1) of the Banking Companies Ordinance, 1962. Additionally, the Securities and Exchange Commission of Pakistan (SECP) maintains an approved list of auditors for insurance and takaful entities, none of which specify or imply the use of the term “Big Four.”
Under the Competition Act, 2010, limiting service provisions to a select group violates the principles of open and fair competition. Through its directives in these cases, the CCP has reaffirmed its commitment to fostering open competition across all commercial and economic activities in the country, emphasizing the importance of transparent selection processes to ensure a level playing field for all firms in the market.
