Law: Brokers and Agents Registration Rules, 2001

Section: 8

Brokers and Agents Registration Rules, 2001--R. 8---Failure to pay credit balance---Securities and Exchange Commission of Pakistan received complaints that credit balances available in their (complainants) accounts with the company had not been paid to them despite their repeated requests---Complainants had provided letters of authorization (Authority Letters) to the company whereby they authorized a person to trade into their accounts on their behalf---Company issued cheques in favour of the authorized person to offset its liability towards the complainants without any approval from them---According to Authority Letter, authorized person was only authorized to receive "A/C Payee Cheque" from the company issused only in the names of the complainants---Authorized Representative of the company admitted that the company in order to clear its liabilities towards the complainants issued cheques in the name of the Authorized Person on the assumption that the complainants would not object to payments being made to their blood relation, who was fully authorized to act on their behalf---Company admitted its inadvertent error and in order to settle the claim it stated that it had again issued cheques in the name of the respective complainant, equivalent to the disputed amount---Company submitted that the error was neither deliberate nor wilful---Error was human and the actions of the company were bona fide at all times---Statements and conduct of the company showed that omission was not a wilful or deliberate, but was an error and mistake emanating from misreading of the provision of Authority Letter---Taking a lenient view, show-cause notice issued to the company was withdrawn, in circumstances. ORDER HASNAT AHMAD, DIRECTOR (BR&ICW).---This Order shall dispose of the proceedings initiated through Show Cause Notice ("SCN") No.(BRL-138)/SE/SMD/2006 dated April 18, 2012 issued to Messrs Highlink Capital (Private) Limited ("the Respondent") under Rule 8 of the Brokers and Agents Registration Rules 2001 ("the Rules"). 2. Brief facts of the case are that the Respondent is a member of the Lahore Stock Exchange (G) Ltd. ("the LSE") and is registered with the Securities and…

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