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H.G. MARKETS (PRIVATE) LIMITED vs COMMISSIONER-SMD, SECP Ss — 2024 CLD 1381 SECURITIES-AND-EXCHANGE-COMMISSION-OF-PAKISTAN

Case information

Citation
2024 CLD 1381 SECURITIES-AND-EXCHANGE-COMMISSION-OF-PAKISTAN
Year
2024
Reporter
CLD
Parties
H.G. MARKETS (PRIVATE) LIMITED vs COMMISSIONER-SMD, SECP Ss
Provisions referred to
S. 57; Futures Market Act

Fields are extracted from the reported citation and judgment text. Where a detail is not stated in the record, it is not shown.

Judgment text as reported

H.G. MARKETS (PRIVATE) LIMITED VS COMMISSIONER-SMD, SECP Ss. 57, Cls. (a) to (f), 123(8) & 123(10)---Provisions relating to standards of conduct, non-compliance of---Whether broker fulfilled its duties diligently towards its customers---Appellant (a futures broker of the Pakistan Mercantile Exchange /PMEX) was penalized by Securities and Exchange Commission of Pakistan ('the Commission')---Allegation levelled by the complainants was that they had given discretionary authority to the employees of the appellant to trade in their accounts and the employees of the appellant indulged in excessive trading with the sole objective of generating commission, resultantly they lost all or a significant part of their investments---Contention of the appellant was that S. 57(d) of the Futures Market Act, 2016 ('the Act 2016') did not require the appellant to seek instructions from the customer in writing---Validity---Contention of the appellant was misconceived as the provision under S.57(d) of the Act, 2016 did not specify any other mode, and thus must be read in the context of overall scheme of law and the functions entrusted to the Commission where investor protection was of primary importance---Penalty imposed on the appellant vide impugned order was, inter alia, on account of contravention of clauses (a), (b), (c), (f) and (i) of S.57 of the Futures Market Act, 2016, and not under clause (d) of the S. 57(d) of the Futures Market Act, 2016---However, it could be argued that excessive trading had a subjective connotation but the said argument could have carried weight had there been recording of circumstances and investment objectives of the customer by the appellant as envisaged under S.57(d) of the Futures Market Act, 2016---Appellate Bench modified the impugned order to the extent that the penalty imposed upon the appellant vide impugned order was reduced to Rs.3,500,000/----Appeal was disposed of accordingly.

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