 |
|
For business information, annual reports, laws, ordinances, regulations and articles. |
|
|
Appendix
- B: Significant Developments in Legal Framework
A synopsis of the main amendments
made in laws administered by the Commission during the period under review is as follows:
1. Securities and Exchange Ordinance, 1969
(Amendments made through the Securities and Exchange (Amendment) Ordinance, 2000
dated September 07, 2000
Section 2
New terms, as noted below, have been defined:
a) agent
b) associate
c) asset management company
d) balloter
e) commission
f) dealer
g) sub-underwriter
h) transfer agent
i) underwriter
j) venture capital company
Section 5A
A new Section 5A has been inserted providing that no person shall act as a broker or agent
to deal in the business of effecting transactions in securities, unless the person is
registered with the Commission.
Section 7
The Commission has been empowered to suspend a director, officer or member of a stock
exchange, besides the original power to remove them.
Section 8
The words ‘bonus entitlement voucher’ have been deleted from the Section, which
originally exempted such vouchers from the requirement of listing on stock exchanges.
Section 9
a) The powers of the Federal Government for directing a stock exchange to list or not
to delist or for hearing appeal against the order on the stock exchange have been assigned
to the Commission.
b) The powers of the Commission to suspend the trading in any listed security for 60 days
and to extend the period for another 60 days at any time have been specifically provided.
Section 10
The powers of compulsory listing of securities have been assigned to the Commission.
Section 21
The original provision that enquiry may be conducted by the Federal Government on the
representation of one-fifth of the members of the stock exchange has been amended so that
the Commission may conduct enquiries on the representation of one-tenth of the members of
the stock exchange.
Section 22
The power of the Federal Government to impose fines in case of violations of law has been
assigned to the Commission. Additionally, the maximum amount of fine amounting to Rs.
30,000 has been enhanced to Rs. 100,000.
Section 24
The maximum amount of fine amounting to Rs. 30,000 has been enhanced to Rs. 500,000.
Section 26
This Section, containing provisions relating to ‘revision and review’, has been
deleted in view of the specific provisions of the Act.
Section 28
This Section, containing provisions relating to delegation of powers, has been deleted due
to specific provisions of the Act.
Section 32
This Section has been substituted. The new Section provides for the regulation of venture
capital companies, besides the regulation of the business of asset management companies,
investment advisors and investment companies.
Section 32C
A new Section 32C has been inserted, which provides that the business of transfer agents,
balloters, underwriters, sub-underwriters and consultants shall be regulated in the manner
provided in the rules to be prescribed.
Section 33
Sections 5A, 32A, 32B and 32C have been added to the list of sections in which case rules
are to be made.
2. Securities and Exchange Commission of Pakistan Act, 1997
(Amendments made through the Securities and Exchange
Commission of Pakistan (Amendment) Ordinance, 2000)
Section 2
Interpretation of "Law of Insurance" has been inserted.
Section 5
a) Requirement of having experience in ‘insurance’ has been added for the
eligibility of a person to be appointed as a Commissioner.
b) The Commission has been empowered to make regulations relating to the conduct of its
meetings.
c) The Commission has been empowered to determine the remuneration of the Commissioners
and the Chairman, with the approval of the Policy Board.
Section 12
a) Number of total members of the Policy Board has been increased from seven to nine.
b) Number of • members has been increased from four to five, after including •
Secretary, Commerce Division, as one of the members.
c) Number of members from the private sector has been increased from three to four and the
requirement of having experience in ‘insurance’ has been added to determine the
eligibility of a person to be appointed as a member.
d) Maximum age for the appointment of a member of the Board has been fixed at 65 years.
Section 20
a) Clause (o) of sub-Section (4) has been made more specific by incorporating all the
relevant laws in which powers of the Commission are extended.
b) Law of Insurance has been brought within the powers and functions of the Commission.
c) A new sub-Section (7) has been inserted empowering the Commission to call for any
document or information from the companies.
Section 21
Insurance industry and its law have been brought within the functions and powers of the
Policy Board.
Section 22
Insurance business has been brought within the regulatory control of the Commission.
Section 23
Ambiguity in the law as regards sources of income of the Commission has been removed.
Section 24
Anomaly in the text has been removed to provide that the Commission shall submit its
budget to the Policy Board for approval not later than 30 days before expiry of each
financial year.
Section 25
a) Law of insurance has been included in the activities of the Commission for
preparing the annual report.
b) The original provision that there shall be joint auditors of the Commission has been
substituted with the new provision that auditor shall be appointed by the Commission with
the approval of the Federal Government.
Section 26
The words "if so decided by the Board and" have been deleted so as to make the
provision more specific.
Section 28
The Commission has been allowed to open its accounts with a scheduled bank with the
approval of the Policy Board.
Section 39
The minimum period of 60 days for publication of rules, for eliciting public opinion, has
been reduced to 30 days.
Section 40
a) The words • have been deleted and the Board may make
regulations on the recommendations of the Commission and in consultation with the Federal
Government.
b) The Commission may make its regulations in consultation with the Board against the
original provision, which required approval of the Board.
c) The minimum period of 60 days for publication of draft regulations, for eliciting
public opinion, has been reduced to 30 days.
Section 43
Amendment has been made in clause (b) to remove ambiguity in the law. According to the
amended provision, the rules under all corporate laws are to be made by the Commission
with the approval of the Federal Government.
Section 43A
A new Section 43A has been inserted in line with Section 43, to deal with the matters
relating to abolition of the Department of Insurance and rights and privileges of its
employees.
New Rules/Regulations Framed
In addition to amendments in laws, a number of new rules/regulations have been framed and
existing rules amended during this period to facilitate the administration of relevant
laws. These are:
Under the Companies Ordinance, 1984
1. Companies (General Provisions and Forms) Rules, 1985
a) Amendments made vide Notification No. S.R.O. 594(I)/2000 dated 25.8.2000
b) Amendments made vide Notification No. S.R.O. 259(I)/2001 dated 30.4.2001
2. Leasing Companies (Establishment and Regulation) Rules, 2000
3. The Companies (Buy-back of Shares) Rules, 1999
a) Amendments made vide Notification No. S.R.O. 830(I)/2000 dated 16.11.2000
4. The Companies Share Capital (Variation in Rights and Privileges) Rules, 2000
5. Public Companies (Employees Stock Option Scheme) Rules, 2001
Under the Securities and Exchange Ordinance, 1969
1. Venture Capital Companies and Venture Capital Funds Rules, 2001
2. Stock Exchange Members (Inspection of Books and Records) Rules, 2001
3. Brokers and Agents Registration Rules, 2001
4. Listed Companies (Prohibition of Insider Trading) Guidelines, 2001
Under the Securities and Exchange Commission of Pakistan Act, 1997
1. Securities and Exchange Commission of Pakistan (Conduct of Business) Regulations, 2000
2. Securities and Exchange Policy Board (Conduct of Business) Regulations, 2000
3. Members, Agents and Traders (Eligibility Standards) Regulations, 2001
