Law: Securities Act, 2015

Section: 150,64

Securities Act (III of 2015)--- ----Ss. 150 64---Securities (Leveraged Markets and Pledging) Rules, 2011, R. 34---Securities Brokers (Licensing and Operations) Regulations, 2016, Regln. 34---Pakistan Stock Exchange Limited Regulations, Reglns. 4.18.1(c) 19.5---National Clearing Company of Pakistan Limited Regulations, 2015, Regln. 12.9.3---Disciplinary action in respect of licensed person---Licensing requirement---Prohibition---Preparation and submission of financial statements---Segregation of clients accounts by the brokers---Maintenance of collateral account---Obligation of clearing members to collect margins from their clients---Scope, a securities broker, was imposed upon a penalty for extending credit to its clients for trading of securities without registration as Financee/Financier; making margin payments on behalf of its clients; financing through other than regulated modes; charging mark-up from its clients in the guise of late payment charges; not maintaining collateral account under its participant account; failing to reduce continued debit balances of clients; failing to recover margins from its clients for the trades executed in the ready market; failing to recover Mark to Market (MtM) losses of Future Market, in the form of cash and failing to make additional disclosures in quarterly accounts and providing finance facility to various brokerage houses---Validity had not denied existence of the receivables (continued debit balances) from its clients; extending credit to clients through modes other than permissible under R. 34 of Securities (Leveraged Markets and Pledging) Rules, 2011; charging mark-ups on continued debit balance of clients and self-enhancement of Financing Participation Ratio (FPR) ratio to 35% instead of 25%, as provided in National Clearing Company of Pakistan Limited Regulations, 2015---Violations against the appellant were established, however, appellant had significantly reduced the quantum of continued debit balance of clients and mark-up---Appellate Bench, keeping in view, the appellants efforts to comply with the requirements of the Framework reduced the penalty---Appeal was disposed of accordingly. ORDER 1. This Order…

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