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

Section: 33

Securities and Exchange Commission of Pakistan Act (XLII of 1997)--Ss. 33 & 43(b)---Securities and Exchange Ordinance (XVII of 1969), Ss. 5-A & 22---Brokers and Agents Registration Rules, 2001, Rr.8, 12 & Third Sched.---Short selling under Ready Market Regulations, 2002, Reglns. 2(i) & 2(J)---Sale and purchase of shares without any pre-existing interest in the shares---Imposition of penalty---Appellant company in its proprietary account sold and purchased shares and said trade was executed by the company without having any pre-existing interest in the shares, which was 'short sale'---'Short sale' as per Regln. 2(J) of the Short Selling Under Ready Market Regulations, 2002, was a sale by a member or a client, who at the time of sale did not have a pre-existing interest in the securities---Short sale was permissible, as long as the member or a client had a contractual borrowing arrangement to ensure that the delivery requirements were met on the settlement dates---Company, in the present case, had not entered into a borrowing arrangement to ensure that the delivery requirements would be met---Penalty of Rs.2.5 million had been imposed on the company as company despite issuance of order under S.22 of the Securities and Exchange Ordinance, 1969 and several warnings thereafter had failed to comply with the requirements of law---Contention that S.22 of the Securities and Exchange Ordinance, 1969 could not be invoked as provisions of Brokers and Agents Registration Rules, 2001 were self-contained and penal provisions had already been provided therein, was misconceived---Said Rules were secondary or subordinate legislation made under S.43(b) of Securities and Exchange Commission of Pakistan Act, 1997, read with S.5-A of Securities and Exchange Ordinance, 1969---Rules were made to implement the requirements of the Ordinance (1969) which would prevail---Penalty, in circumstances was rightly imposed on the appellant company under S.22 of Securities and Exchange Ordinance, 1969. 1984 CLC 2456 rel. ORDER 1. This order shall dispose of Appeal No. 22 of 2010 filed under section 33 of the Securities and Exchange Commission of Pakistan (the "Commission") Act,…

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