Licensed entities: Adjudication division given certain powers

The Securities and Exchange Commission of Pakistan (SECP) has delegated powers and functions of the SECP Act 1977 to the Commissioners, Head of Department and Head of Wings of Adjudication Department-I of the Adjudication Division pertaining to the licensed entities except non-profit organizations and listed companies.

The SECP has issued SRO 1545 (I)/2019 in this regard. Through another SRO 1546 (I)/2019, the SECP has also delegated the powers and functions of the Commission under the Limited Liability Partnership Act, 2017 and Companies (Appointment of Legal Advisers) Act, 1974 and the rules and regulations framed thereunder to the Commissioner (Corporatization and Compliance Department), Head of Department, Wing Head and Adjudication Officers of Adjudication Department-II of Adjudication Division in relation to companies other than listed and licensed entities except the NPOs licensed under section 42 of the Companies Act and limited liability partnerships.

According to the SRO 1545 (I)/2019 of the SECP, the commission delegates following powers and functions of the Commission to the Commissioners, Head of Department and Head of Wings of Adjudication Department-I of the Adjudication Division in relation to licensed entities: They can exercise power to restrict business, power to issue directions to self-regulatory organization and impose penalty violation of rules, regulations, notification and directive made/given.

Commissioners, Head of Department and Head of Wings of Adjudication Department-I of the Adjudication Division have been empowered to review of disciplinary actions taken by securities exchange, issue direction to a securities exchange, by notice in writing, either of a general or specific nature, review of disciplinary actions taken by clearing house, issue direction to a clearing house, by notice in writing, either of a general or specific nature and issue directive to a central depository, by notice in writing, either of a general or specific nature.

Commissioners, Head of Department and Head of Wings of Adjudication Department-I of the Adjudication Division have been authorized to impose fine on the NBFC or the notified entity and its officers (including auditors), imposition of fine for carrying out business after suspension of registration or license by the Commission, disqualify an officer (including auditors) of a NBFC if the officer fails to make payment, within the prescribed period, from holding any office in any company or NBFC for such period as may be specified and impose penalty for making false statement.

In case the post of Head of Department, Adjudication Department-I is a vacant or incumbent is unable to perform his duties, the powers and functions delegated to him through this notification, shall be exercised by the any other officer designated by the Commission as Head of Department, Adjudication-I for the time being.

In case the post of Wing Head is a vacant in Adjudication Department-I or incumbent is unable to perform his duties, the powers and functions delegated to him through this notification, shall be exercised by the Head of Department, Adjudication Department-I.

The powers delegated as above, to the Wing Heads of the Adjudication Department- I, shall be exercised concurrently by the Head of Department, Adjudication Department-I, if the circumstance so warrants.

The Commission shall have the authority to exercise all powers delegated above to the Commissioners, Head of Department and Wing Heads of the Adjudication Department-I concurrently. This notification shall not affect anything done, order made, notification issued, show cause issued, circular made, proceeding commenced, penalty imposed and/or collected, sanction granted, approval made, fee directed or collected, direction given, investigation, inspection or inquiry conducted or any other action taken or done under or in pursuance of the above referred superseded notifications, shall be valid and under lawful authority.

Any pending proceedings under the aforesaid modified or superseded notifications of delegation of power shall stand transferred to the delegated authority provided in this Notification forthwith, who shall proceed with the matter as it stands prior to the coming into the effect of this notification, the SECP added.

Under SRO 1546 (I)/2019, the Commissioner (Corporatization and Compliance Department), Head of Department, Wing Head and Adjudication Officers of Adjudication Department-II of Adjudication Division would be empowered to revoke the license of the specified categories of companies.

Commissioner (Corporatization and Compliance Department), Head of Department, Wing Head and Adjudication Officers of Adjudication Department-II of Adjudication Division would be authorized to impose penalty on non-trading corporation formed with purely provincial objects, extending its operational activities beyond the territorial limits of its respective province.

Commissioner (Corporatization and Compliance Department), Head of Department, Wing Head and Adjudication Officers of Adjudication Department-II of Adjudication Division would be allowed to impose fine on contravention or failure to comply with any provisions of the Regulations, and a further fine in case of continuing failure. Association with Charitable and Not for Profit Objects Regulations, 2018 and impose penalty on contravention of any provision of the Regulations and a further penalty in case of continuing default.

Under SRO 1546 (I)/2019, the powers in respect of companies having registered office in the province of Khyber Pakhtunkhwa, Gilgit-Baltistan and Islamabad Capital Territory including civil division Rawalpindi, shall be exercised by the Adjudication Officer, Adjudication Department-II, Islamabad.

The powers in respect of companies having registered office in the province of Sindh and Balochistan shall be exercised by the Adjudication Officer, Adjudication Department-II, Karachi. The powers in respect of companies having registered office in the province of Punjab except Rawalpindi Division shall be exercised by the Adjudication Officer, Adjudication Department-II, Lahore.

In case the post of Head of Department, Adjudication Department-II is vacant or incumbent is unable to perform his duties, the powers and functions delegated to him through this notification, shall be exercised by any other officer designated by the Commission as Head of Department, Adjudication Department-II for the time being. In case the post of Wing Head of Adjudication Department-II is vacant or incumbent is unable to perform his duties, the powers and functions delegated to him through this notification, shall be exercised by the Head of Department, Adjudication Department-II. In case the post of any of the Adjudication Officers of Adjudication Department-II is vacant or incumbent is unable to perform his duties, the powers and functions delegated to him through this notification, shall be exercised by the Wing Head, Adjudication Department-II. The powers delegated as above, to the Wing Head and Adjudication Officers of Adjudication Department-II, shall be exercised concurrently by the Head of Department, Adjudication Department-II, if circumstance so warrants.

The powers delegated as above, to the Adjudication Officers of Adjudication Department-II, shall be exercised concurrently by the Wing Head, Adjudication Department-II, if circumstance so warrants.

The Commission shall have the authority to exercise all powers delegated above to the Commissioner, Head of Department, Wing Head and Adjudication Officers, concurrently. This notification shall not affect anything done, order made, notification issued, show cause issued, circular made, proceeding commenced, penalty imposed and/or collected, sanction granted, approval made, fee directed or collected, direction given, investigation, inspection or inquiry conducted or any other action taken or done under or in pursuance of the above referred superseded notifications, shall be valid and under lawful authority. Any pending proceedings under the aforementioned superseded or modified notifications of delegation of power shall stand transferred to the delegated authority provided in this Notification forthwith, who shall proceed with the matter as it stands prior to the coming into the effect of this notification.