Law: Brokers and Agents Registration Rules, 2001

Section: R-12,Third Schedule

Brokers and Agents Registration Rules, 2001--Rr. 8, 12 & Third Schedule---Code of Conduct of Brokers Rules, 2001, Cls. A-2 & A-5---Purchase and sale of shares without having pre-existing interest in the shares---Imposition of penalty---Company which was a member of Stock Exchange and was registered with the Commission under Brokers and Agents Registration Rules, 2001, first sold shares of corporation; and subsequently squared its position by purchasing the shares---Show-cause notice was issued to the company, but the company neither acknowledged the receipt of said show-cause notice nor submitted its written reply to the Commission---Subsequently, Chief Financial Officer and Company Secretary attended the hearing and submitted that 'Blank Sale' transaction as highlighted by the Commission were un-intentional trades on their part---Company was established to have placed the sale orders in its proprietary accounts without having pre-existing interest and without fulfilling the prerequisites of the Regulations---Company by executing such transactions had violated Regulations, which in turn was violation of Code of Conduct set forth under the Third Schedule of the Brokers and Agents Registration Rules, 2001, that made it mandatory on the company to execute its business with due care and skill---Company had violated clauses A.2 and A.5 of the Code of Conduct of Brokers Rules, 2001, which in turn was a violation of said Rules---Conduct of the company during the course of subject proceedings, was irresponsible and casual---Violation of the Rules and Regulations was a serious matter which entitled the Commission to suspend the company's membership, but taking lenient view, Commission in exercise of its power under R.8(b) of the Brokers and Agents Registration Rules, 2001, imposed on company a penalty of Rs.100,000 with direction to the company to ensure that full compliance be made of all Rules, Regulations and directives of the Commission in the future for avoiding any punitive action under the law. ORDER IMRAN INAYAT BUTT, DIRECTOR (SM).---This order shall dispose of the proceedings initiated through Show-Cause Notice bearing No.1(07) BS/ KSE/ MSW/SMD/2009…

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