Law: Securities and Exchange Ordinance, 1969

Section: 22,22(c),34

Law: Unified Trading System Regulations

Section: 6.1.1,6.1.2

Law: Brokers and Agents Registration Rules, 2001

Section: R.7

(a) Securities and Exchange Ordinance (XVII of 1969)--- ----Ss. 22(c) & 34---Brokers and Agents Registration Rules, 2001, R. 7---Unified Trading System Regulations, Reglns. 6.1.1 & 6.1.2---Broker trading on stock exchange without renewal of registration---Penalty imposed on stock exchange---Securities and Exchange Commission of Pakistan ('the Commission') imposed a penalty of Rs. 1 million on (Lahore) Stock Exchange for allowing a broker to continue trading without renewal of its registration in violation of Reglns. 6.1.1 & 6.1.2 of the Unified Trading System Regulations ("Regulations")---Plea of Stock Exchange (appellant) that the broker in question forwarded its application for renewal of registration to the Stock Exchange who then forwarded it to the Commission; that the matter was delayed considerably by the Commission and in the meantime show cause notice was issued to Stock Exchange to show as to why penalty should not be imposed on it; that role of the Stock Exchange was that of a post office, as it was merely to forward the request of the broker for renewal of registration to the Commission, and in fact it was the responsibility of the Commission to renew the registration of the broker, that too within time; that in the event the Commission was unable to renew the registration in time, it must intimate to the Stock Exchange and the broker that the registration had not been renewed or it was still pending---Held, that Regln. 6.1.2 of the Regulations clearly provided that the Stock Exchange or the COMMISSION could suspend use of the terminal immediately if a member or broker did not meet the criteria given under Regln. 6.1.1 of the Regulations---Stock Exchange's contention that it was the responsibility of the Commission to suspend the operation of a member at its terminal was totally misplaced as the Regulations clearly placed this responsibility on Stock Exchange as well as on the Commission---Brokers and Agents Registration Rules, 2001 ('the Rules') provided that the application for renewal of registration was to be forwarded through the Stock Exchange, however the intent of such rule was to enable the Stock Exchange to monitor the…

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