Law: Securities and Exchange Ordinance, 1969

Section: 22

Securities and Exchange Ordinance (XVII of 1969)--S. 22---Brokers and Agents Registration Rules, 2001, Rr. 8, 12 & Third Sched.---"Wash Trades"---Examination of the trading data of Karachi Automated Trading System of Karachi Stock Exchange, showed that the company bought and sold shares in such a way that orders for buy and sell matched with each other; and did not result in any change in ownership of the shares---Said transactions fell within the meaning and ambit of the term "Wash Trades" which had created false and misleading impression in the market and was a violation of the regulatory framework---Unfair trade practice like "Wash Trades" were detrimental for the development of the market and damaged the market integrity---Execution of such trades had shown that the company had failed to maintain high standard of integrity and had been unsuccessful in exercising due care, skill and diligence in conduct of its business---Company was established to have contravened the provisions of the Code of Conduct of Brokers Rules, 2001---Violation of the Rules and Regulations was a serious matter which could even lead to suspension or cancellation of registration of the company by the Securities and Exchange Commission---Company having assured to adopt cautious approach in future, taking a lenient view in the matter, a penalty of Rs.100,000 was imposed on the company---Company was strongly advised by the Commission to take immediate measures and put in place proper checks in its Order Management System to restrict such orders, which could result in execution of "Wash Trades"---Company was also directed to ensure that full compliance was made of all the rules, regulations and directives of the Commission in future for avoiding serious punitive action under the law. ORDER IMRAN INAYAT BUTT, DIRECTOR/HOD (MSCID).---This order shall dispose of the proceedings initiated through Show Cause Notice (the "SCN") bearing No. 1 (03)/Wash/ KSE/MSW/SMD/2009/dated 6-6-2012, under section 22 of the Securities and Exchange Ordinance, 1969 (the "Ordinance") and the Brokers and Agents Registration Rules, 2001 (the "Brokers Rules") issued to Pearl Capital Management (Pvt.) Limited (the…

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