Develop-ment of transparent and efficient securities market is one of the prime objectives of the Securities and Exchange Commission of Pakistan ('SECP'). Accordingly, Securities Market Division of SECP took enforcement actions and penalised the market participants for non-compliances to the regulatory framework during the period April till June 2014.
Pursuant to the on-site inspections of the brokerage houses of the Karachi Stock Exchange Limited (KSE), enforcement action against We Financial Services Limited was taken, wherein penalty of Rs 500,000 was imposed mainly because of failure to maintain capital adequacy requirement and proper books of accounts. Moreover, Fair-trade Capital Securities (Private) Limited was also penalised for non-compliance regarding Know Your Customer and Customer Due Diligence requirements.
SECP issued two orders against KSE and its officials for failure to take appropriate enforcement actions in a timely manner in respect of non-compliances reported in the System Audit Reports of the brokers and deviation from the process and requirements as laid down in the System Audit Regulations. Penalty of Rs 1,000,000 was imposed on KSE; Rs 200,000 and Rs 500,000 was imposed on Managing Director and Deputy Managing Director of KSE respectively.
In addition, Enforcement actions were taken and penalties were imposed against brokers of Lahore Stock Exchange namely Javed Iqbal Securities (Private) Limited, Millennium Markets (Private) Limited, Harvest Smartrend Securities (Private) Limited and S.Z Securities (Private) Limited for non-compliances related to Brokers and Agents Registration Rules, 2001.
Furthermore, 12 orders were passed against directors/beneficial owners of 6 listed companies under section 224(4) of the Companies Ordinance, 1984 for late filing of returns of beneficial ownership and 59 warning letters were issued to the directors/beneficial owners of 29 listed companies in the same context. To promote and develop the capital market of Pakistan, SECP granted approval to issue, circulate and publish the offer for sale documents of United Bank Limited and Pakistan Petroleum Limited shares. SECP also granted approval to issue, circulate and publish the prospectuses for the issue of Sukuks by Engro Corporation Limited and for issue of TFCs by NIB Bank Limited. During the period April till June 2014, 27 complaints pertaining to listed companies and 11 complaints pertaining to investors of the stock market were resolved.-PR
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