MRA SECURITIES LIMITED vs COMMISSIONER (SMD), SECP, ISLAMABAD S — 2021 CLD 187 SECURITIES-AND-EXCHANGE-COMMISS

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MRA SECURITIES LIMITED VS COMMISSIONER (SMD), SECP, ISLAMABAD S. 40a---Securities and Exchange Commission of Pakistan (anti-Money Laundering and Counter Financing of Terrorism) Regulations, 2018, Reglns. 3, 4, 6, 7 & 13---Securities Brokers (Licensing and Operations) Regulations, 2016, Reglns. 16(5), 16(9)(e) & 16(12)(i)---Penalty for violations of Rules, Regulations, Directives and Notifications---Scope---appellant was imposed upon a penalty for assigning incorrect risk rating to its clients; its failure to establish internal audit function; opening a trading account of the immediate family member of the Chief Executive of another brokerage house; its failure to obtain evidence relating to the source of income of nineteen clients; its failure to establish beneficial ownership of six clients and its failure to develop a mechanism to ensure ongoing monitoring of its clients---appellant's contention was that the inspection was carried out before issuance of the Securities and Exchange Commission of Pakistan (anti Money Laundering and Counter Financing of Terrorism) Regulations, 2018 (Regulations), therefore, sufficient time was not provided to understand it and comply with its requirements---Validity---Held; earlier regulatory framework was not materially different in terms of its requirements with the Regulations---Contrary to the assertion of respondent, appellant had established an internal audit department under the Securities Brokers (Licensing and Operations) Regulations, 2016---appellant's Chief Executive or his family had not traded through another securities broker rather it was the family member of another securities broker who had traded through the appellant---Memorandum of appeal, reply of the show cause notice and inspection observations were sufficient to establish that the appellant had failed to comply with the mandatory regulatory requirements of the Regulations---appellate Bench declined to interfere in the penalty imposed through the impugned order--- appeal was dismissed.

MRA SECURITIES LIMITED vs COMMISSIONER (SMD), SECP, ISLAMABAD S — 2021 CLD 187 SECURITIES-AND-EXCHANGE-COMMISSION-OF-PAKISTAN

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