Non-compliance of regulatory framework: SECP penalises stock market participants

In order to develop an efficient and dynamic securities market and to safeguard the investors' interest, the Securities Market Division of the Securities and Exchange Commission of Pakistan took enforcement actions and penalised the market participants for non-compliance to the regulatory framework during the month of December 2011.
An order was passed against Zafar Moti Capital Securities Ltd, member of KSE, under the Brokers and Agents Registration Rules, 2001, whereby the registration of the said brokerage house was suspended for 15 days for non-compliance to the Commission's earlier orders.
Further, a show-cause notices were served to a commercial bank under section 15E of the Securities and Exchange Ordinance, 1969 and to a brokerage house of KSE under Section 22 of the Securities and Exchange Ordinance, 1969. In two separate instances, warning letters were issued to two brokerage houses of KSE and two individual investors for execution of Wash Trades. Warning letters were also issued to two brokers of KSE and LSE for execution of Blank Sales.
Moreover, 2 warning letters were issued to the directors of a listed company for non-compliance to Section 224 (4) of the Companies Ordinance, 1984. The copies of all warning letters are available on the SECP's website. During the month, SECP granted approval under Section 57(1) of the Companies Ordinance, 1984 to issue, circulate and publish the prospectus for issue of 12.50 million ordinary shares by Next Capital Limited. Twenty-two investor complaints pertaining to brokers and 4 complaints pertaining to listed companies were resolved. Further, three amendments were approved in the regulatory framework of NCCPL and ISE.-PR