Law:

Section:

Securities and Exchange Ordinance (XVII of 1969)-------Ss. 6, 18 & 22---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3 & 4---Securities and Exchange Rules, 1971, R.2(d) & Third Sched.---Irregularities in calculation of "Net Capital Balance (NCB)"---Inspection report submitted by the Inspection Team, had highlighted major irregularities in calculation of 'Net Capital Balance (NCB)'---"Net Capital Balance" appeared to be not in accordance with Third Schedule of Securities and Exchange Rules, 1971---After examining the written and verbal submissions made on behalf of the company, it was observed that company had failed to perform its professional duty with due care, and, had shown negligence in verifying the calculation and certifying the Net Capital Balance---Amount of securities purchased for clients appearing in NCB, was required to be verified with sufficient appropriate evidence---Company had failed to obtain sufficient evidence and did not apply the necessary prudence in certifying the NCB, and it was not aware about the significance of NCB, the relevant Rules, Regulations, methods of certification and the systemic risk involved as a result of overstatement---On account of professional misconduct and negligence in performing duty by the company with due care, competence and diligence, Commission in exercise of the powers under S.22 of Securities and Exchange Ordinance, 1969 imposed a penalty of Rupees Twenty Thousand on the company, with direction to the company to ensure full compliance with Securities and Exchange Ordinance, 1969, Rules, Regulations and directives of the Commission in future. ORDER HASNAT AHMAD, DIRECTOR (MSRD).---This order shall dispose of the proceedings initiated through Show Cause Notice No.4(BRK-148) SE/SMD/02 dated January 23, 2013 ("the SCN") issued to Messrs Avais Hyder Liaquat Nauman, Chartered Accountants, ("the Respondent") under section 22 of the Securities and Exchange Ordinance, 1969 ("the Ordinance"). 2. Brief facts of the case are that the Securities and Exchange Commission of Pakistan ("the Commission") in exercise of its powers under subsection (1) of section 6 of the Ordinance read…

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