Law: Securities and Exchange Ordinance, 1969

Section: 22

Securities and Exchange Ordinance (XVII of 1969)---S.22---Brokers and Agents Registration Rules, 2001, Rrs. 8, 12 & Sched.---Placing sale orders of shares without having pre-existing interest in Proprietary Account---Imposition of penalty---Company had placed the large sale orders and cancelled the same without having pre-existing interest in its Proprietary Account---Company vide its letter admitted its mistake and stated that all said sales were erroneously executed by one of its KATS operator and that same mistake would not be repeated in future---Company was responsible for each and every order placed or trade executed through its terminals---Prime responsibility of the company was to monitor all trading activities being carried out through its brokerage house in order to track any transaction being made with a view to create any misleading impression or fraudulent intention---Rule 12 of Brokers and Agents Registration Rules, 2001 required that company should abide by Code of Conduct set forth under said Rules; and made it mandatory on the company to execute its business with due care and skill and to put in place proper system and control to ensure that its business was conducted according to the applicable Rules and Regulations---Placing of sale orders and then cancelling the same without having pre-existing interest, had shown that the company had failed to conduct its business with due diligence and care and had interfered in smooth and fair functioning of the market---Company was bound to keep IEATS operators updated with the applicable rules and regulations to avoid any violation of the same and it was also the duty of the company to maintain high standards of integrity, promptitude and fairness, in the conduct of its business and not to create false market or indulge in any act detrimental to the investor's interest---Company by placing the sale orders without having pre-existing interest, had violated A1, A2 and A4 of the Code of Conduct of the Brokers Rules, which, in turn, was a violation of Brokers and Agents Registration Rules, 2001---Securities and Exchange Commission was empowered to take action, in the public interest under R.8 of Brokers…

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