Law: Securities and Exchange Ordinance, 1969

Section: 5,5A,22

Law: Brokers and Agents Registration Rules, 2001

Section: 12,ThirdSchedule

Securities and Exchange Ordinance (XVII of I969)---Ss. 5A & 22---Brokers and Agents Registration Rules, 2001, R.12 & Third Schedule---Contravention of Code of Conduct--Imposition of penalty---After examination of the Karachi Automated Trading System ('KATS') data, it was noted that company had not properly entered clients' codes for execution of inter-exchange trades in various scrips on behalf of clients of Lahore Stock Exchange (Guarantee) members---Commission vide its letter advised the company to provide its comments and documentary evidence to clarify its position in the matter---Reply of the company was not considered satisfactory as it did not contain any cogent reason, explanation, evidence or justification regarding the execution of the clients trading in the Proprietary Accounts of Lahore Stock Exchange members---In order to have the fair, efficient and transparent market, it was critical that every trade executed at a stock exchange should be tracked to recognize the true identity of beneficial owner---Act of the company to execute the client's trading in Proprietary Accounts of Lahore Stock Exchange members, were contra to the provisions of the legal framework engrained in the Code of Conduct prescribed under Securities and Exchange Ordinance, 1969 and the Brokers and Agents Registration Rules, 2001---Such execution had shown that company had failed to maintain high standard of integrity and fairness in conduct of the business---Company had also failed to comply with specific directive issued by the Commission---Company, in circumstances, had violated clauses A1, A2, A5 and D1(2) of the Code of Conduct contained in Third Schedule prescribed under S.5A of Securities and Exchange Ordinance, 1969 and R.12 of Brokers and Agents Registration Rules, 2001, attracting the penal provisions of S.22 of the Ordinance---Violation of said provisions of law was a serious matter, however, in view of an express assurance communicated by representative of the company of complete compliance of applicable laws in future, taking lenient view, fine of Rs.50,000 was imposed on the company with direction to the company to ensure full compliance of all the laws…

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