Law: Securities Act, 2015

Section: 150

Securities Act (III of 2015)--- ----S. 150---Securities (Leveraged Markets and Pledging) Rules, 2011, R. 34---Pakistan Stock Exchange Limited Regulations, Reglns. 4.18.1 19.5---National Clearing Company of Pakistan Limited Regulations, 2015, Regln. 12.9.3--- Disciplinary action in respect of licensed person---Segregation of clients assets by the brokers---Obligation of brokers to collect margins from their clients---Scope was warned by the Commission to comply with the regulatory framework for financing clients despite non-availability of sufficient funds in its clients accounts, for making payment to clients who had debit balance, for its failure to recovery mark to market (MtM) losses in the form of cash and for its failure to collect margins from the clients for the trades executed in the ready market---Validity had violated R. 34 of Securities (Leveraged Markets and Pledging) Rules, 2011 by extending unlawful financing to clients and executing trades in their accounts despite non-availability of sufficient funds as well as by making payments to clients despite existence of debit balance---Continued debit balances were also in contravention of Regln. 4.18.1(c) of Pakistan Stock Exchange Limited Regulations which required the appellant to maintain a collateral account under its participant account in the Central Depository System which was to be used where outstanding payment had not been received from clients in respect of securities purchased on their behalf and relevant purchase obligations had to be settled had failed to recover MtM losses from its clients and also did not collect margins in contravention of Regln. 19.5 of the Pakistan Stock Exchange Limited Regulations read with Regln. 12.9.3 of the National Clearing Company of Pakistan Limited Regulations, 2015 had not come with any cogent reasons or given any satisfactory explanation as to why said violations took place---Impugned order was upheld and the appeal was disposed of accordingly. ORDER I. This Order is passed in the matter of Appeal No.94 of 2017 filed under section 33 of the Securities and Exchange Commission of Pakistan Act, 1997 against the Order dated 31/07/17 (the Impugned Order) passed…

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