Law: Central Depository Company of Pakistan Regulations, 2002

Section: 4

(a) Central Depository Company of Pakistan Regulations, 2002--Regln. 4---Brokers and Agents Registration Rules, 2001, R.8 & Third Schedule---Making blank sales---Imposition of penalty---Regulation 4 of Central Depository Company of Pakistan Regulations, 2002 prohibited blank sales, but findings of the Enquiry Officer had revealed 6,829 instances of blank sales by the company during the review period---Contention of company was that instances identified by the Enquiry Officer were not blank sales and the respective clients had pre-existing interest at the time of the trades---Further contention of the company was that in certain cases customers instructed execution of a sale order and undertook to deliver securities to the broker-6,013 instances of blank sales had been established to have been made by the company in violation of Regulation 4 of Central Depository Company of Pakistan Regulations, 2002 attracting sub-rule (iii) of R.8 of Brokers and Agents Registration Rules, 2001 and company also failed to comply with clause A5 of the Code of Conduct contained in the Third Schedule of Brokers Rules, 2001, thereby attracting sub-rule (iv) of R.8 of said rules---Penalty of Rs.100,000 was imposed on the company under R.8(b) of Brokers and Agents Registration Rules, 2001. (b) Securities and Exchange Rules, 1971--- ----R.4(1)---Brokers and Agents Registration Rules, 2001, R.8---Failure to maintain order register---Findings of the Enquiry Officer had revealed that order register as mentioned in R.4(1) of Securities and Exchange Rules, 1971 was not maintained by the company during the review period---Contention of the company was that said register was not possible to maintain due to practical difficulties and computer generated reports were maintained as a solution---Said computer generated reports as described by the company were not a substitute for the order register as required under R.4(1) of Securities and Exchange Rules, 1971---Securities and Exchange Commission, however, was cognizant of the practical difficulties associated with the maintenance of such an order register manually---Lenient view of the matter was taken and instead of taking any punitive…

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