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

Section: 20

Securities and Exchange Commission of Pakistan Act (XLII of 1997)--Ss. 20(4) & 33---Securities and Exchange Commission Ordinance (XVII of 1969), Ss.5-A, 7 & 22(1)(c) --- Brokers and Agents Registration Rules, 2001, Rr. 5 & 7---Appeal before Appellate Bench of the Commission---Trading as broker by member of Stock Exchange during period after expiry date of certificate of registration and before getting the same renewed---Failure of Stock Exchange to take cognizance of such illegal trading by broker---Commissioner (Securities Market) imposed penalty on broker and Stock Exchange for violation of Rr.5 & 7 of Brokers and Agents Registration Rules, 2001 and S.5-A of Securities and Exchange Commission Ordinance, 1969---Validity---Broker under Brokers and Agents Registration Rules, 2001 could not do trading after the expiry date of certificate of registration--­Stock Exchange was supposed and required to protect investors within parameters defined by law and applicable rules, which could not be done by perpetuating and facilitating illegal trade by a member---Record showed that Stock Exchange had once suspended trading by such broker, but had removed suspension on the same date thus, had facilitated the broker to undertake illegal trading---Stock Exchange had failed to perform its duties as frontline regulator and had not acted bona fide--­Commissioner had taken lenient view in the matter, who could have proceeded against Stock Exchange under S.7 of the Ordinance---Appeal was dismissed in circumstances. ORDER Through this appeal Islamabad Stock Exchange (Guarantee) Limited (hereinafter, "ISE") has impugned the order dated 27-1-2003 passed by Mr. Shahid Ghaffar, learned Commissioner (Securities Market), whereby he imposed a penalty of Rs.25,000 each on ISE and Premier Capital Management (Private) Limited (hereinafter "Premier Capital") which is a corporate member of ISE, under section 22(1)(c) of the Securities and Exchange Ordinance, 1969 (the "Ordinance"), for violation of rules 5 and 7 of the Brokers and Agents Registration Rules, 2001 (the "Rules") and section 5-A of the Ordinance. 2. Briefly stated the facts of the case are that Premier Capital was…

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