AZEE SECURITIES (PVT.) LIMITED vs COMMISSIONER, (SMD), SECP, ISLAMABAD S

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AZEE SECURITIES (PVT.) 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, 13 & 14---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 non-maintenance of consolidated list of its clients risk categorization; non-establishment of internal audit function; not conducting customer due diligence (CDD) of its clients; not obtaining evidence of source of funds of its clients; not establishing beneficial ownership of its clients; non-development of ongoing mechanism to ensure that the transactions were consistent with its knowledge of the customers and its failure to report cash transaction of Rs.2 million and above to the Financial Monitoring Unit (FMU)---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---appellant had admitted that the requirements of clients risk assessment; internal audit function and ongoing mechanism for monitoring CDD were not met after enactment of the Regulations---Earlier regulatory framework was not materially different in terms of its requirements with the Regulations---Establishment of internal audit department was part of the licensing requirement of the appellant---Penalty for failure to report currency transaction could not have been imposed on the appellant as the cash was received and deposited in the Bank account and the Bank was required to report it---appellate Bench reduced the penalty of fine and the appeal was disposed of accordingly.

AZEE SECURITIES (PVT.) LIMITED vs COMMISSIONER, (SMD), SECP, ISLAMABAD S — 2021 CLD 28 SECURITIES-AND-EXCHANGE-COMMISSION-OF-PAKISTAN

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