Law: Securities and Exchange Rules, 1971

Section: R.8(1)

Law: Securities and Exchange Commission of Pakistan Act, (XLII of 1997)

Section: 33

Law: Securities and Exchange Ordinance, 1969

Section: 22

Securities and Exchange Rules, 1971--- ----R. 8(1)--- Securities and Exchange Ordinance (XVII of 1969), S.22---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure to maintain proper books of accounts, having failed to maintain proper books of accounts during relevant period, in contravention of R.8(1) of Securities and Exchange Rules, 1971, show cause notice was served to the appellant---Securities and Exchange Commission of Pakistan (Commission) being dissatisfied with the response of the appellant found that appellant had failed to comply with the requirements of R.8(1) of Securities and Exchange Rules, 1971 and imposed penalty of Rs.200,000 had accepted the discrepancies in the books of accounts and stated that observations made by the Commission had been addressed, however, requested for leniency for waving off the penalty---Validity---Failure of appellant to maintain proper books of accounts and non-compliance of statutory provisions being a serious matter, no leniency could be shown--- Impugned order was upheld by the Appellate Bench. THIS ORDER PASSED BY: SHAUZAB ALI, COMMISSIONER (SCD-S&ED/IE & IR) 1. This Order is passed in the matter of Appeal No.30 of 2017 filed under section 33 of the Securities and Exchange Commission of Pakistan (Commission) Act, 1997 (SECP Act) against the order (Impugned Order) dated 10/03/17 passed by the Respondent. 2. Sakarwala Capital Securities (Pvt.) Ltd (Appellant) is a Trading Entitlement Certificate Holder of Pakistan Stock Exchange Limited (PSX) and registered as a broker with the Securities and Exchange Commission of Pakistan under the Brokers and Agents Registration Rules, 2001 (Brokers Rules). The Commission vide order dated 02/05/16 appointed an inspection team to inspect the books and record of the Appellant. As per the inspection report, the Appellant did not maintain proper books of accounts during 01/01/15 to 31/12/15 in contravention of Rule 8(1) Securities and Exchange Rules, 1971 (SE Rules) detailed as under: i. Wrongly categorized the loan account of Rs. 300,000/- namely provided to Zishan Abid Kholia under the head of client account. ii. The Appellant understated its…

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