Act XLII of 1997 · 57 pages
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Updated Till 22.8.2022
THE SECURITIES AND EXCHANGE COMMISSION OF
PAKISTAN ACT, 1997
CONTENTS
PART I
PRELIMINARY
SECTIONS:
1. Short title and commencement.
2. Definitions.
PART II
THE COMMISSION
3. Establishment of the Commission.
4. Head Office.
5. The Commissioners.
6. The Chairman.
6A. The Acting Chairman.
7. Term of office of the Commissioners.
8. Appointment of employees of the commission.
9. Appointment of advisers and consultants.
10. Delegation of the Commission's functions or powers.
11. The Commission to furnish information.
11A. Committees of the Commission.
PART III
THE BOARD
12. The Securities and Exchange Policy Board.
13. Procedure of the Board.
14. Board may invite others to meetings.
15. Committees of the Board.
Page 1 of 57
PART IV
CONFLICT OF INTEREST
16. Disclosure of interest by Commissioners and Members.
17. Notification of interest by others.
PART V
DISQUALIFICATION, REMOVAL, RESIGNATION AND VACANCIES
18. Disqualification of Members and Commissioners.
19. Removal, resignation and vacancies.
PART VI
POWERS AND FUNCTIONS
20. Powers and functions of the Commission.
21. Functions and powers of the Board.
22. Supplementary provisions.
PART VII
FINANCE
23. The Fund.
24. Expenditure to be charged on the Fund.
25. Annual report and accounts.
26. Power to obtain finance, borrow money and receive grants.
27. Investment.
28. Bank Accounts.
28A. Inspection.
PART VIII
INSPECTION, INVESTIGATION AND ENFORCEMENT
29. Investigation and proceedings by the Commission.
30. Powers of the investigating officers of the Commission.
31. Forcible entry.
31A. Power of the Commission to call for information.
32. Power to call for examination.
32A. Implementation of orders of the Commission.
32B. Review.
33. Appeal to the Appellate Bench of the Commission.
Page 2 of 57
34. Appeal to the Court.
PART IX
CONFIDENTIALITY OF INFORMATION
35. Obligation of confidentiality.
36. Permitted disclosure.
PART IX A
POWERS OF INTERVENTION BY COMMISSION
36A. Scope of powers under this Part.
36B. Restriction of business.
PART IX B
SELF REGULATORY ORGANIZATION
36C. Self-regulatory organizations.
36D. Registration of self-regulatory organizations.
36E. Regulations of self-regulatory organization.
36F. Maintenance and inspection of records.
36G. Powers of the Commission to issue directions to self-regulatory organization.
PART IX C
AUDIT OVERSIGHT BOARD
36H. Definitions.
36I. Establishment of AOB.
36J. Members of AOB.
36K. Functions of AOB.
36L. Appointment of employees of AOB.
36M. Disclosure of interest.
36N. Disqualification of members.
36O. Removal, resignation and vacancies.
36P. Fund of AOB.
36Q. Conduct of business of AOB.
36R. Accounts and Audit.
36S. Annual report.
36T. Registration and deregistration of audit firm.
36U. Inspection and proceedings by AOB.
36V. Appeal to the Court.
36W. Register of audit firms.
Page 3 of 57
36X. AOB may seek assistance.
36Y. Registration and supervision fees.
36Z. Power to make regulations.
36AA. Power to give directions, circulars, code, guidelines etc.
36BB. Power to call for information.
36CC. Penalty, sanctions or revocation of registration.
PART X
COGNIZANCE AND PROSECUTION OF OFFENCES
37. Cognizance of offences.
38. Prosecution of Offences by the Commission.
38A. Opportunity of hearing to the Commission in stay matters.
PART XI
RULES AND REGULATIONS
39. Power to make rules.
40. Power to make regulations.
40A. Penalty for violation of rules, regulations, directives and notification.
40AA. Fines and penalties to be credited to the Federal Consolidated Fund.
40B. Power of the Commission to issue directives, circulars, guidelines, etc.
PART XII
GENERAL
41. Common seal.
41A. Standard of proof.
41B. Inquiry, investigation and other Proceedings in respect of regulated persons.
42. Public servants.
42A. Indemnity of the Commission, Chairman, Commissioners, employees and Member.
42B. Recovery of penalties.
42C. Proof of documents by production of certified copies.
42D. Cooperation and assistance to foreign regulatory authorities.
42E. Power to amend the Schedule.
43. Dissolution of the Authority.
43A. Abolition of Department of Insurance.
44. Savings.
45. Act to override other laws.
Page 4 of 57
THE SCHEDULE.
POWERS AND FUNCTIONS CONFERRED ON THE AUTHORITY UNDER THE
ORDINANCE TO BE EXERCISED BY THE COMMISSION THE SCHEDULE I
ADMINISTERED LEGISLATION
Page 5 of 57
SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN ACT, 1997
ACT No. XLII OF 1997
An Act to provide for the establishment of the Securities and Exchange Commission of
Pakistan and to provide for matters connected therewith and incidental thereto.
WHEREAS it is expedient to provide for the establishment of the Securities and Exchange
Commission of Pakistan for the beneficial regulation of the capital markets, superintendence and
control of corporate entities and for matters connected therewith and incidental thereto;
It is hereby enacted as follows:—
PART I
PRELIMINARY
1. Short title and commencement.—(1) This Act may be called as the Securities and
Exchange Commission of Pakistan Act, 1997.
(2) It extends to the whole of Pakistan.
(3) Save for section 43, the Act shall come into force at once and section 43 shall come into
force on such *date as the Federal Government may, by notification in the official Gazette, appoint.
2. Definitions. 1[(1)] In this Act, unless there is anything repugnant in the subject or context,—
(a) “appointed day” means the day on which section 43 comes into force;
1
[(aa) “administered legislation” means the legislation administered by the
Commission as specified in the Schedule I;]
(b) “Authority” means the Corporate Law Authority constituted under the
Companies Ordinance, 1984 (LXVII of 1984);
(c) “Board” means the Securities and Exchange Policy Board established under
section 12;
(d) “Chairman” means the Chairman of the Commission 1[and includes the Acting
Chairman];
(e) “civil servant” means a civil servant as defined in section 2 of the Civil Servants
Act, 1973 (LXXI of 1973);
1
[(f) “clearing house” means a company that is licensed by the Commission as a
clearing house;]
*
i.e. 1-1-1999 , See SRO 1404(1)/98, dt 31-12-98
1
Numbered, added, ins. and subs. by Act XXXVI of 2016, s. 2.
Page 6 of 57
(g) “Commission” means the Securities and Exchange Commission of Pakistan
established under section 3;
(h) “Commissioner” means a Commissioner of the Commission and shall include
the Chairman thereof;
(i) “committee” means a committee of the 1[Commission or the Board] constituted
under 1[this Act] ;
1
[(ia) “Court” means the Company Bench of a High Court as provided in sections 7
and 8 of the Companies Ordinance, 1984 ( XLVII of 1984 )]
(j) “dealing in securities” means making or offering to make, whether as principal
or agent, with any person or inducing or attempting to induce any person to
enter into or to offer to enter into—
(i) any agreement for or with a view to acquiring, disposing of, subscribing
for or underwriting securities, or
(ii) any agreement the apparent or ostensible purpose of which is to secure
a profit to any of the parties from the yield of securities or by reference
to fluctuations in the value of securities;
1
[(ja) “document” includes any information recorded in any form, including documents
or statement of accounts in respect of customers maintained by financial
institution, through modern electronic devices or techniques and data or
information recorded in any legible form;]
(k) “employee'' means any officer or servant of the Commission;
1
[(ka) “financial services” mean all services provided by regulated persons under this
Act or any administered legislation, but shall not include any service exclusively
regulated by the State Bank of Pakistan;
(kb) “financial services market” mean all markets in which financial services are
provided and includes the capital market and the insurance market;]
(l) “Fund” means the fund established under section 23;
2
[(la) “Law of insurance” means the Insurance Ordinance, 2000 (XXXIX of 2000) or
any other law in relation to insurance, the administration of which is vested in
the Commission by the Federal Government by notification in the official
Gazette.].
(m) “Member” means a Member of the Board;
1
Subs. and Ins. by Act XXXVI of 2016, s. 2.
2
Ins. by Ord. LV of 2000, s. 2.
Page 7 of 57
(n) “NBFI” means a non-banking financial institution and includes a development
finance institution, a Modaraba, a leasing company, a housing finance company
and an investment bank but shall not include a banking company as defined in
clause (c) of section 5 of the Banking Companies Ordinance, 1962 (LVII of
1962);
(o) “Ordinance” means the Companies Ordinance, 1984 (XLVII of 1984);
(p) “private sector person” means a person who is not in the service of Pakistan or
of any statutory body or any body which is owned or controlled by the Federal
Government or a Provincial Government not including a University or an
educational institution;
1
[(pa) “regulated activity” means any activity which is required to be registered with or
licensed by the Commission under this Act or any administered legislation;
(pb) “regulated person” means a person or entity licensed or registered under this
Act or any administered legislation to carry on or engage in a regulated activity
not being an institution exclusively regulated by the State Bank of Pakistan;]
(q) “regulations” means the regulations made by the Board or the Commission; [*]1
(r) “rules” means the rules made by the Federal Government [;]1
1
[(s) “Schedule” means schedule annexed to this Act;
(t) “self regulatory organization” means an entity connected with financial services
market and registered by the Commission under this Act for the purpose of
regulating the operations, standards of practice and business conduct of its
members and their representatives with a view to promote protection of
investors and the public interest;
(u) “specified” means specified by the Commission through regulations made
under this Act;
(v) “subordinate legislation” means any rules or regulations made under this Act or
any administered legislation; and
(w) “systemic risk” means the risks, including potential, emerging and systemic
risks in financial services market, entities, infrastructure, products and activities
which may impact the ability of the Commission to fulfil its regulatory
responsibilities provided in this Act. ]
1
[(2) Unless the context requires otherwise, the words and expressions used in this Act but not
defined herein shall have the same meaning as assigned to them under the administered legislations.]
1
Ins, omitted, subs. and added by Act XXXVI of 2016, s. 2.
Page 8 of 57
PART II
THE COMMISSION
3. Establishment of the Commission.—(1) There is hereby established a Commission to be
called the Securities and Exchange Commission of Pakistan.
(2) The Commission shall be a body corporate with perpetual succession and a common seal,
and may sue and be sued in its own name and, subject to and for the purposes of this Act, may enter
into contracts and may acquire, purchase, take, hold and enjoy movable and immovable property of
every description and may convey, assign, surrender, yield up, charge, mortgage, demise, reassign,
transfer or otherwise dispose of or deal with, any movable or immovable property or any interest vested
in it, upon such terms as it deems fit.
1
[(3) The Commission shall be administratively, financially and functionally independent and
the Federal Government shall use its best efforts to promote, enhance and maintain independence of
the Commission.]
4. Head Office. The head office of the Commission shall be in Islamabad. The Commission
may establish and close down offices at such other places in Pakistan as it considers necessary.
5. The Commissioners.—(1) Subject to sub-section (2), the Commission shall consist of such
number of Commissioners, including the Chairman, appointed by the Federal Government as may be
fixed by the Federal Government but such number shall not be less than five and more than seven. A
Commissioner shall be a person who is known for his integrity, expertise, experience and eminence in
any relevant field, including the securities market, law, accountancy, economics, finance 2[insurance]
and industry.
(2) The majority of the commissioners shall always be of private sector persons.
(3) Subject to the provisions of this Act, the Commission shall, in discharge of its functions
and exercise of its powers, conduct its proceedings in accordance with the regulations made by the
2
[Commission].
2
[(4) The Commissioners, including the Chairman, shall be paid such remuneration and
allowances as the Commission may, with the approval of the Board, determine.]
3
[(5) No act, proceeding or decision of the Commission shall be invalid by reason only of the
existence of a vacancy in, or defect in the constitution of the Commission.].
6. The Chairman.—(1) The Federal Government shall appoint one of the Commissioners to
be the Chairman of the Commission, and no Commissioners shall be appointed Chairman for more
than two consecutive terms.
(2) The Chairman shall be the chief executive officer of the Commission and shall, together
with the other Commissioners, be responsible for the day to day administration of the affairs of the
Commission and shall, subject to the regulations made by the Commission, be assisted by the other
Commissioners in carrying out the functions of the Commission.
1
Added by Act XXXVI of 2016, s. 3.
2
Ins. Subs., added by Ord. LV of 2000, s. 3.
3
Subs. by Act XVIII of 2013, s.2.
Page 9 of 57
1
[6A. The Acting Chairman. At any time when position of the Chairman is vacant or the
Chairman is unable to perform his functions due to any cause, the Federal Government shall appoint
senior most Commissioner of the Commission to be the Acting Chairman of the Commission until
appointment of the Chairman on a regular basis:
Provided that the Federal Government shall ensure the appointment of Chairman on regular
basis within hundred and twenty days from the date the post of Chairman fell vacant.]
7. Term of office of the Commissioners.—(1) Not less than three of the Commissioners
(excluding the Chairman) first appointed under this Act, to be selected at random ballot in accordance
with such procedure as may be approved by the Board (the “Term A Commissioner”) shall hold office
for a term of two years, shall retire on the expiration of that term and may be re-appointed for a further
term of three years. The Commissioners, other than the Term A Commissioners (including the
Chairman, the “Term B Commissioners”) shall hold office for a term of three years, shall retire on the
expiration of that term and may be re-appointed for a further term of three years.
2
[(2) At the end of each term, initial or further, or at the end of the cumulative period of five
years, in case of the Term A Commissioners, or six years, in case of Term B Commissioners, as
provided for in sub-section (1), the relevant number of Commissioners shall cease to hold office and
any vacancy thus arising shall in each case be filled by appointment of the requisite number of qualified
persons as Commissioners, each for a term of three years starting from the date of appointment:
Provided that a Commissioner shall be deemed to have retired at the end of such three-years
unless, being eligible for re-appointment, he is re-appointed.]
3
[(3) Notwithstanding anything contained in sub-sections (1) and (2),-
(a) a person who, on the date of his appointment is more than sixty-two years of
age, shall not be appointed as a Commissioner; and
(b) a Commissioner shall cease to hold office attaining the age of sixty-five years.]
8. Appointment of employees of the Commission.—(1) The Commission may, from time to
time, employ persons to be employees of the Commission who shall be paid such remuneration and
allowances and shall hold their employment on such terms and conditions as may be determined by
the Commission with the approval of the Board.
(2) The employees of the Commission shall hold office during the pleasure of the Commission
and shall be liable to disciplinary action in accordance with the procedure laid down by the
Commission with the approval of the Board.
9. Appointment of advisers and consultants.―(1) Subject to sub-section (2), the
Commission may, employ and pay consultants and agents and technical, professional and other
advisers including, without limitation, bankers, stockbrokers, surveyors, valuers, actuaries,
accountants, lawyers, and other persons to transact any business or to do any act required to be
transacted or done in the exercise of its powers, the performance of its functions or for the better
implementation of the purposes of this Act.
1
Ins by Act XXXVI of 2016, s. 4.
2
Subs by Ord. XVIII of 2013, s. 3.
3
Subs., Ins. by Act. I of 2008, s. 15.
Page 10 of 57
(2) The decision to employ and the terms of employment of external advisers and consultants
shall be made by the Commission in accordance with such policy guidelines as the Commission may,
in consultation with the Board, establish from time to time.
10. Delegation of the Commission's functions or powers.—(1) The Commission may,
subject to such conditions and limitations as it may deem fit to impose, delegate any of its functions
or powers 1[under this Act or any administered legislation] to one or more Commissioners or any
officer of the Commission.
(2) A delegation under this section shall not prevent the concurrent performance or exercise by
the Commission of the functions or powers so delegated.
11. The Commission to furnish information. The Commission shall furnish to the Federal
Government or the Board such information with respect to the policy it is pursuing or proposes to
pursue in the performance of any of its functions under this Act as the Federal Government or the
Board may, from time to time, require.
1
[11A. Committees of the Commission. The Commission may constitute committees,
consultative group, task force etc. as it considers necessary or expedient to assist it in performance of
its functions under this Act or any administered legislation.].
PART III
THE BOARD
12. The Securities and Exchange Policy Board.—(1) The Federal Government shall appoint
a Securities and Exchange Policy Board consisting of 2[eleven] Members.
(2) Of the Members—
3
(a) [five] shall be—
3
[(i) ex-officio the Finance Minister or, in his absence, the Advisor to Prime
Minister on Finance, as the case may be,] and
(ii) ex-officio the Secretary to the Government of Pakistan Law Division;
4
[(iia) ex-officio Secretary to the Government of Pakistan, Commerce Division;]
(iii) ex officio the Chairman of the Commission; and
(iv) a Deputy Governor of the State Bank of Pakistan nominated by the
Governor of the State Bank of Pakistan; and
1
Ins by Act XXXVI of 2016, Ss. 5 and 6.
2
Subs. by Act XXXVI of 2016, s. 7.
3
Subs., Ins by Act I of 2008, s. 15.
4
Subs. Ins. by Ord. LV of 2000, s. 4.
Page 11 of 57
1
(b) [six] appointed by the Federal Government from private sector each of whom
is well-known for his integrity, expertise and experience in the spheres of
commerce and industry (including in particular the securities industry),
corporate law, accountancy, financial services, investment 2[,insurance,]
banking, academia or other related relevant fields of expertise [:]1
1
[Provided that the Federal Government shall ensure the appointment of private sector member
of the Board within hundred and twenty days from the date of such vacancy in the Board.]
(3) A member, not being an ex-officio Member, shall hold office for a term of four years and
shall be eligible for re-appointment for one further four-year term but not more [.]1
1
[* * *]
(4) An ex-officio Member shall hold office as Member till such time as he holds the office by
virtue of which he is a Member and upon his transfer therefrom or retirement, resignation or removal
from office, the person appointed in such Member's place shall be the Member.
(5) If an ex-officio Member is absent from Pakistan or is unable to attend a meeting of the
Board he may authorize an officer, not below the rank of Additional Secretary, of his Division, to act
as Member and such officer, if approved by the Board, may act as Member.
(6) If an ex-officio Member is disqualified to be a Member or resigns his office, the Federal
Government shall,—
(a) in case he is a person referred to in sub-clause (i) or sub-clause (ii) of clause (a)
of sub-section (2), appoint another Secretary as Member, so long such person
holds the post; and
(b) in case of a Deputy Governor appoint another Deputy Governor as Member.
3
[(7) The Federal Government shall designate one of the Members to be the Chairman of the
Board who shall, in the event of a tie, have a casting vote.];
13. Procedure of the Board.—(1) The Board shall meet as often as may be necessary for the
performance of its functions but not less than four times in a calendar year.
(2) The quorum for a meeting of the Board shall be 4[five] Members, including the Chairman.
(3) Subject to the provisions of this Act, the procedure and conduct of business of the Board
shall be regulated by the regulations made by the Board.
14. Board may invite others to meetings. The Board may invite any person to attend any of
its meetings or deliberations (including any of its committees) for the purpose of advising it on any
matter under discussion but any person so attending shall have no right to participate in any decision
or vote at the said meeting or deliberation.
1
Subs. Ins. and omitted by Act XXXVI of 2016, s. 7.
2
Ins. by Ord. LV of 2000, s. 4
3
Subs by Act of I of 08, s. 15.
4
Subs. by Act. XXXVI of 2016, s. 8.
Page 12 of 57
15. Committees of the Board.—(1) The Board may constitute such number of its committees
as it considers necessary or expedient to assist it in the performance of its functions under this Act.
(2) A committee constituted under this section shall act in accordance with the regulations
made by the Board.
(3) Except as otherwise provided in the regulations made by the Board, the meetings of a
committee shall be held at such times and places as the Chairman of the committee may determine.
(4) The Members, other than ex-officio Members, commissioner or employees, and any other
person invited to attend any meeting of the Board or a committee shall be entitled to such compensation
and reimbursement of expenses as the Board may from time to time determine by regulations.
PART IV
CONFLICT OF INTEREST
16. Disclosure of interest by Commissioners and Members.—(1) For the purpose of this
and the next following section, a person shall be deemed to have an interest in a matter if he has any
interest, pecuniary or otherwise, in such matter which could reasonably be regarded as giving rise to a
conflict between his duty to honestly perform his functions under this Act and such interest, so that his
ability to consider and decide any question impartially or to give any advice without bias, may
reasonably be regarded as impaired.
(2) A Commissioner or a Member having any interest in any matter to be discussed or decided
by the Commission or the Board or a committee shall, prior to any discussion of the matter, disclose
in writing, respectively, to the Commission, the Board or a committee, as the case may be, the fact of
his interest and the nature thereof.
(3) A disclosure of interest under sub-section (2) shall be recorded in the minutes of the
Commission, the Board, or a committee, as the case may be, prior to any discussion of, or decision on,
the matter and, after the disclosure, the Commissioner or, as the case may be the Member—
(a) shall not, save, in the case of Commissioners, as provided in sub-sections (7) to
(9), take part nor be present in any deliberation or decision of the Commission,
the Board or a committee, as the case may be, and
(b) shall be disregarded for the purpose of constitution of a quorum of the Board,
the Commission or a committee, as the case may be.
(4) Any Commissioner, Member or the member of a committee who fails to disclose his interest
as required by this section shall be guilty of an offence and shall on conviction be liable to
imprisonment for a term which may extend to one year, or a fine not exceeding one million rupees, or
both.
(5) It shall be a valid defence for a person charged with an offence under sub-section (4) if he
proves that he was not aware of the facts constituting the offence and that he exercised due care and
diligence in discovering those facts which he ought reasonably to have known in the circumstances.
Page 13 of 57
(6) Each Commissioner shall give written notice to the Federal Government of all direct or
indirect pecuniary interests that he has or acquires in a body corporate carrying on a business in
Pakistan. The nature of such interests and the particulars thereof shall be disclosed in the annual report
of the Commission made under section 25.
(7) If a Commissioner is not the Chairman and the Chairman becomes aware that a
Commissioner has the interest, the Chairman shall,—
(a) if the Chairman considers that the Commissioner should not take part, or
continue to take part, as the case may require, in determining the matter, direct
the Commissioner accordingly, or
(b) in any other case, cause the Commissioner's interest to be disclosed to the
persons concerned in the matter (including any person whose application is
pending decision or adjudication by the Commission).
(8) The Commissioner in respect of whom a direction has been given under clause (a) of sub-
section (7) shall comply with the direction.
(9) If the Commissioner is the Chairman, he shall disclose his interest to the persons concerned
in the matter (including any person whose application is pending decision or adjudication by the
Commission).
(10) Subject to sub-section (7), the Chairman or the Commissioner who has any interest in any
matter referred to in this section shall not take part, or continue to take part, as the case may require,
in determining the matter unless everyone concerned in it consents to the Chairman or, as the case may
be, the Commissioner so taking part.
17. Notification of interest by others.—(1) Where a person who, in the course of,—
(a) performing a function, or exercising a power, as a delegate of the Commission,
(b) performing functions or service as an employee, or
(c) performing a function or services in any capacity by way of assisting or advising
the Commission, the Board, any committee or any delegate of the Commission,
is required to consider a matter in which he has an interest, such person shall
forthwith give to the Commission a written notice stating that he is required to
consider the matter and has an interest in it and setting out particulars of the
interest.
(2) The person referred to in sub-section (1) shall also declare his interest in accordance with
the said sub-section whenever it is necessary to avoid the conflict of interest.
PART V
DISQUALIFICATION, REMOVAL, RESIGNATION AND VACANCIES
18. Disqualification of Members and Commissioners. No person shall be appointed or
continue as a Member or Commissioner if he—
Page 14 of 57
(a) has been convicted of an offence involving moral turpitude;
(b) has been or is adjudged insolvent;
(c) is incapable of discharging his duties by reasons of physical, physiological or
mental unfitness and has been so declared by a registered medical practitioner
appointed by the Federal Government;
(d) being a Member, absents himself from three consecutive meetings of the Board,
without leave of the Board and, in the case of a Member ex-officio, or fails to
appoint another person to act as member under sub-section (5) of section 12, or
(e) fails to disclose any conflict of interest at or within the time provided for such
disclosure by or under this Act or contravenes any of the provisions of this Act
pertaining to unauthorized disclosure of information.
19. Removal, resignation and vacancies.—(1) Subject to sub-section (2), appointment of any
Member or Commissioner may, at any time, be revoked and he may be removed from his office by
order of the Federal Government if it is found that such person stands disqualified under section 18.
(2) Unless a disqualification referred to in section 18 arises from the judgment or order of a
court or tribunal of competent jurisdiction under any relevant provision of applicable law, a Member
or Commissioner shall not be removed or his appointment revoked without an enquiry by an impartial
person or body of persons constituted in accordance with such procedure, as may be prescribed by
rules made by the Federal Government, and such rules shall provide for a reasonable opportunity for
him to be heard in his defence.
(3) A Member or a Commissioner may at any time resign his office by a written notice
addressed to the Federal Government.
(4) The office of a Member or Commissioner shall ipso facto be vacated if he dies.
PART VI
POWERS AND FUNCTIONS
20. Powers and functions of the Commission.— (1) The Commission shall have all such
powers as may be necessary to perform its duties and functions under this Act 1[or any administered
legislation].
(2) The Commission may, having regard to its functions and to exercise its powers efficiently,
organize itself into divisions, wings or such other sub-divisions as it may consider expedient.
(3) The Commission may, from time to time, identify the matters requiring the Board to make
policy decisions and may also make recommendations regarding policy to the Board for its
consideration.
(4) The Commission shall be responsible for the performance of the following functions:
(a) regulating the issue of securities;
1
Ins. by Act. XXXVI of 2016, s. 9.
Page 15 of 57
(b) regulating the business in Stock Exchange 1[Commodity Exchange] and any
other securities markets;
(c) supervising and monitoring the activities of any central depository and Stock
Exchange clearing house;
(d) registering and regulating the working of stock brokers, sub brokers, share
transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue,
underwriters, portfolio managers, investment advisers and such other
intermediaries who may be associated with the 2[financial services market] in
any manner;
(e) proposing regulations for the registration and regulating the working of
collective investment schemes, including unit trust schemes;
(f) promoting and regulating self-regulatory organizations including securities
industry and related organizations such as Stock Exchanges and associations of
mutual funds, leasing companies and other NBFIs;
2
[(fa) establishing and regulating entities for the protection of investors;
(fb) promoting, encouraging and enforcing proper conduct, competence and
integrity of regulated persons;
(fc) proposing regulations for disclosure of information in public interest;]
(g) prohibiting fraudulent and unfair trade practices relating to 2[financial services
market];
(h) promoting investors education and training of intermediaries 1[operating in the
financial services market];
3
[(ha) hearing and deciding investor complaints against persons involved in brokerage
business for violations of securities, laws, rules, regulations, directives, codes,
etc;]
(i) conducting 2[inspections and] investigations in respect of matters related to this
Act and 2[any administered legislation] and in particular for the purpose of
investigating insider trading in securities and 3[initiating action against the]
offenders;
2
[(ia) ensuring development of a sound regulatory framework to counter and suppress
illegal, improper and unfair practices in financial services market and other
sectors regulated by the Commission ;]
(j) regulating substantial acquisition of shares and the merger and take-over of
companies;
1
Ins. by Act I of 2003, s. 11.
2
Ins. Subs. and added by Act XXXVI of 2016, s. 9.
3
Ins. and Subs. by Act I of 2008, s. 15.
Page 16 of 57
1
[(ja) regulating professionals who provide services within the financial service
markets;]
2
[(jb) maintaining and issuing panels of auditors from which companies may appoint
auditors, and approving audit firms for financial institutions, listed companies
and NBFIs;];
(k) calling for information from and undertaking inspections, conducting inquiries
and audits of the Stock Exchanges and intermediaries and self-regulatory
organizations in the 3[financial services market];
3
[(l) considering and suggesting reforms relating to the financial services market,
regulated persons, companies and bodies corporate, including changes to the
constitution, rules and regulations of companies and bodies corporate, securities
exchanges or clearing houses;]
(m) encouraging the organized development of the 3[financial services market and
other sector regulated by the commission] in Pakistan;
(n) conducting research in respect of any of the matters set out in this subsection;
(o) performing such functions and exercising such powers of the 3[* * *] Federal
Government delegated to the 3[Commission] (other than the power to make any
rules or regulations) under the provisions of the Ordinance, 4[the Securities and
Exchange Ordinance, 1969 (XVII of 1969), the Modaraba Companies and
Modaraba (Floatation and Control) Ordinance, 1980 (XXXI of 1980)] and
under any other law for the time being in force 3[or any other law which may be
made after commencement of this Act,] under which any function or power has
been conferred on the 3[Commission].
(p) performing such functions and exercising such powers (other than the power to
make any rules or regulations) under the Ordinance or any other law for the time
being in force as may, after the commencement of this Act, be delegated to it
by the Federal Government and exercising any power or performing any
functions conferred on it by or under any other law for the time being in force ;
5
[*]
(q) proposing regulations in respect of all or any of the aforesaid matters for the
consideration and approval of the Board 5[; and]
5
[(r) Exercising all powers, discharging all duties and performing all functions
assigned to the Commission under, and generally administering, the law of
Insurance;
(s) ensuring and monitoring compliance by insurers, insurance surveyors and
insurance intermediaries of all laws, rules and regulations pertaining to
insurance for the time being in force;
1
Ins. by Act IV of 2007, s. 17 (w.e.f. 1-7-2007)
2
Ins. by Act I of 08, s.15.
3
Subs. Omitted, and Ins., by Act XXXVI of 2016, s. 9.
4
Ins by Act IV of 1999, s.17.
5
Omitted, subs. and Added by Ord LV of 2000, s.5
Page 17 of 57
(t) regulating professional organizations connected with the Insurance business;
1
[omitted]
(u) encouraging the organized development of the insurance market in Pakistan] 1[;
and]
(v) promoting and regulating development of Private Pension Schemes and Funds;
2
[*]
2
[(w) to control and minimize misconduct, market abuse and financial crime in the
financial services market and other sectors regulated by Commission;]
2
[(x) for regulating and facilitating the growth of Shariah compliant financial
products in the financial services market except the financial products regulated
by the State Bank of Pakistan;
(y) to identify and address the factors resulting in systemic risk in the markets
regulated by the Commission;
(z) to regulate and facilitate healthy growth of the corporate sector (private and
public), and to promote good corporate governance for development of efficient
management and prudent financial practices;
(za) establishing a foundation or fund to provide for welfare support and facilities to
the employees whether serving or retired and their families and to create,
establish, organize and assist in the social and cultural activities;
(zb) to regulate financial services market to ensure that they function in a fair,
efficient, transparent and orderly manner; and
(zc) performing any other functions entrusted to the Commission by the Federal
Government from time to time.]
(5) Without prejudice to the provisions of sub-section (4), the approval of the Commission
shall be required by-
(a) all public companies incorporated in Pakistan which intend to issue or offer for
sale securities in markets outside Pakistan or to list such securities on a Stock
Exchange outside Pakistan, in each case, whether directly or through an
intermediary;
(b) all bodies corporate incorporated outside Pakistan which or persons who intend
to issue or offer for sale, securities to the public in Pakistan or to list such
securities on a Stock Exchange; and
(c) all bodies corporate incorporated outside Pakistan which are already listed on a
Stock Exchange, for the listing of and quotation for any additional securities.
1
Omitted, subs. and added by Act I of 03 see 11
2
Omitted, Subs. and added by Act XXXVI of 2016, s. 9.
Page 18 of 57
(6) In performing its functions and exercising its powers, the Commission shall strive
(a) to maintain facilities and improve the performance of companies and of
1
[financial services market], in the interest of commercial certainty, reducing
business costs, and efficiency and development of the economy;
(b) to maintain the confidence of investors in the 1[financial services market] by
ensuring adequate protection for such investors;
1
[(ba) to create awareness among investors and to provide an appropriate degree of
protection for investors, having regard to the general principle that investors
should take responsibility for their decisions;]
(c) to achieve uniformity in how it performs those functions and exercise those
powers;
(d) to administer laws effectively but with a minimum of procedural requirements;
(e) to receive, process, and store, efficiently and quickly, the documents lodged
with, and the information given to, it under this Act, the Ordinance or any other
law;
(f) to ensure that the documents, and the information referred to in clause (e) are
available as soon as possible for access by the public; 2[*]
2
[(fa) to maintain the confidence of holders of insurance policies by protecting the
interests of policy holders and beneficiaries of insurance policies in all matters,
including assignment of insurance policies, nomination by policy holders,
insurable interest, surrender value of policies of life insurance, and other terms
and conditions of contracts of insurance;
(fb) to improve existing methods and devise new options for the expeditious
settlement of claims and disputes between insurers and policy holders and
between insurers and intermediaries;
(fc) to promote efficiency in the conduct of insurance business;
(fd) to promote the establishment and development of professional and educational
organizations connected with insurance business with a view to improving the
quality of insurance services in the country;
(fe) to promote awareness among consumers with respect to the benefits of
insurance and the existence of measures to safeguard the interests of
mortgagors, mortgagees and potential policy holders; and]
(g) to take whatever action it can take, and is necessary, in order to enforce and give
effect to 1[this Act, any administered legislation] or any other law.
1
Subs., Ins. and added by Act XXXVI of 2016, s. 9.
2
Omitted and Ins. by Ord. LV of 2000, ss. 5-6.
Page 19 of 57
2
[(7) The Commission, and the Commissioner or officer to whom any of the functions or
powers have been delegated under section 10 may, for the purposes of a proceeding or enquiry, require
anyone-
(a) to produce before, and to allow to be examined and kept by, an officer of the
Commission specified in this behalf, any books, accounts or other documents
in the custody or under the control of the person so required, being documents
relating to any matter the examination of which may be considered necessary
by the Commission or such Commissioner or officer; and
(b) to furnish to an officer of the Commission specified in this behalf such
information and documents in his possession relating to any matter as may be
necessary for the purposes of the proceeding or enquiry.]
21. Functions and powers of the Board.—(1) Subject to the provisions of this Act, the Board
shall-
(a) when so asked to do and after consultation with the Commission, advise the
Federal Government on all matters relating to-
(i) the securities industry 2[and insurence industry];
2
[(iia) regulation of the insurance sector and protection of the interests of
insurance policy holders;]
(iii) measures to encourage self-regulation by the Stock Exchanges
1
[insurers, Insurance intermediaries, Insurance surveyours] and NBFIs
by specifying and the standards for such selfregulatory organizations;
(iv) measures to promote the development of and to regulate the securities
market; 1[and the insurance market]; and
(v) other related matters;
2
[(b) consider and approve (with or without modification) any regulations with
respect to implementation of policy decisions, proposed to be made by the
Commission under the Act.]
(c) consider and approve (with or without modification) the budget for each
financial year of the Commission prepared and submitted to it pursuant to the
provisions of subsection (2) of section 24;
(d) express its opinion in writing on any policy matter referred to it by the Federal
Government or the Commission;
(e) oversee the performance of the Commission to the extent that the purposes of
this Act are achieved;
1
Added by Act 4 of 1999, s.17.
2
Amended by Ord. LV of 2000, ss, 5-6.
Page 20 of 57
(f) exercise all such powers and perform all such functions as are conferred or
assigned to it under this Act; and
(g) specify fees, penalties and other charges chargeable by the Commission for
carrying out the purposes of this Act.
(2) All policy decisions, including any change in previously established policy, in respect of
all and any matters within the jurisdiction of the Commission shall be made only by the Board. The
Board may make policy decisions suo motu or adopt such policy recommendation of the Commission,
with or without modification, as the Board may deem fit in its sole discretion.
22. Supplementary provisions. —(1) All guidelines decisions and directives whether of the
Board or the Commission shall be in writing expressed by resolutions, orders or in such other form as
may be appropriate in the circumstances and shall be authenticated in the manner prescribed by the
regulations, and where so provided by regulations, also sealed with the seal of the Commission.
(2) All policy decisions and directives of the Board and the Commission respectively shall be
published in the official Gazette and the Board and the Commission shall make” such publications
available to the public.
(3) The Commission shall, in adjudicating upon the rights of any person whose application on
any matter it is required to consider in the exercise of any power or function under this Act, give the
reasons for its decision after giving the person concerned a personal hearing, in addition to any written
applications or submission which may be required to be made.
(4) The Commission when exercising its powers under this Act shall have regard, so far as,
relevant to the circumstances of the particular case, to―
(a) the viability of the company or body corporate;
(b) the quality and capability of the management of the company or body corporate;
(c) the suitability for listing of the company or body corporate or a Stock Exchange
where applicable;
(d) the interest of public investors, existing or potential, in the company or body
corporate;
1
[(da) the professional competence and capability of persons engaged in the provision
of services in the Insurance Industry;
(db) the interest of insurance policy holders, existing or potential, where applicable;]
(e) any policy decision or directives of the Board; and
(f) the general public interest.
(5) Subject to the compliance of the provisions of sub-section (3), section 24A of the General
Clauses Act, 1897 (X of 1897), shall apply to any order made or direction given under this Act.
1
Inserted by Ord. 55 of 2000, ss, 5-6.
Page 21 of 57
PART VII
FINANCE
23. The Fund.—(1) There is hereby established, for the purposes of this Act, a Fund to be
administered and controlled by the Commission.
(2) The Fund shall consist of—
(a) such sums as the Federal Government may from time to time, grant;
(b) grants of money and sums borrowed or raised by the Commission for the
purposes of meeting any of its obligations or discharging any of its duties;
1
[(c) taxes, fees, penalties or other charges levied under this Act, the Ordinance, the
Securities and Exchange Ordinance, 1969 (XVII of 1969), the Modaraba
Companies and Modaraba (Floatation and Control) Ordinance, 1980 (XXXI of
1980), and Under any other law for the time being administered by the
Commission 1[Law of Insurance] 2[*]
(d) all other sums or property which may in any manner become payable to or
vested in the Commission in respect of any matter incidental to the exercise of
its functions and powers 2[;and]
2
[(e) any other sources as may be notified by the Federal Government.]
(3) It shall be the duty of the Commission to conserve the Fund by performing its functions
and exercising its powers under this Act 2[or any administered legislation] so as to ensure that the total
revenues of the Commission are sufficient to meet all sums properly chargeable to its revenue account.
24. Expenditure to be charged on the Fund.—(1) The Fund shall be expended for the
purpose of—
(a) paying any expenditure lawfully incurred by the Commission, including the
remuneration of Commissioners and employees appointed and employed by the
Commission, including provident fund contributions, superannuating
allowances or gratuities and legal fees and cost and other fees and costs;
(b) paying any other expenses, costs or expenditure properly incurred or accepted
by the Commission in the performance of its functions or the exercise of its
powers under this Act;
(c) purchasing or hiring equipment, machinery and any other materials, acquiring
land and erecting buildings, and carrying out any other work and undertakings
in the performance of its functions or the exercise of its powers under this Act;
1
Subs. by Act 4 of 1999, s. 17.
2
Omitted, subs. added, and ins. by Act XXXVI of 2016, s. 10.
Page 22 of 57
(d) repaying any financial accommodation received or moneys borrowed under
this Act and the profit, return, mark-up or interest due thereon (howsoever
called); and
(e) generally paying any expenses for carrying into effect the provisions of this Act
1
[or any administered legislation].
(2) Within ninety days of its establishment, the Commission shall prepare and submit to the
Board for its approval, a budget for the period up to and including the end of the then current financial
year and thereafter it shall, not later than thirty days 3[before the expiry] of each financial year, submit
to the Board for approval a budget for the next financial year.
(3) No expenditure shall be made for which provision has not been made in any approved
budget except if made from any previously approved contingency funds, unless further approval is
sought and obtained from the Board.
2
[(3A) Any surplus of receipts over the actual expenditure 1[including budgeted capital
expenditure] in a year, after payment of tax, shall be remitted to the Federal Consolidated Fund and
any deficit from the actual expenditure shall be made up by the Federal Government.”; and
(4) The Commission shall act as the secretariat of the Board and provide all the necessary
facilities to enable the Board to exercise its powers and perform its functions under this Act and the
necessary and proper expenses in that connection shall form part of the budget of the Commission.
25. Annual report and accounts.—(1) Within ninety days from the end of each financial year,
the Commission shall, in consultation with the Board, cause a report to be prepared on the activities
of the Commission (including investigations and enquiries made by the Commission under this Act or
the Ordinance 3[or the Law of Insurances] during that financial year and release to the public and
simultaneously send a copy of the report to the Federal Government.
(2) The Commission shall cause proper accounts to be kept and shall as soon as practicable
after the end of each financial year cause to be prepared for that financial year a statement of accounts
of the Commission which shall include a balance-sheet and an account of income and expenditure.
3
[(3) The Commission shall cause the statement of accounts to be audited by auditors,
appointed by Commission with the approval of the Federal Government, who shall be a firm of
chartered accountants. Any casual vacancy in the office of auditor appointed under this section may
be filled in by Commission.]
(4) The auditors shall make a report to the Federal Government, upon the annual balance sheet
and accounts, and in any such report they shall state whether in their opinion the balance sheet is a full
and fair balance sheet containing all necessary particulars and properly drawn up so as to exhibit a true
and correct view of the affairs of the Commission and, in case they have called for any explanation or
information from the Commission, whether it has been given and whether it is satisfactory.
(5) The Federal Government may if it deems fit also required the accounts of the Commission
for any financial year to be audited by the Auditor General of Pakistan.
1
Ins. by Act XXXVI of 2016, s. 11.
2
Ins. by Act XVII of 2012, s. 13.
3
subs. and ins. by Ord. LV of 2000, Ss. 9-10
Page 23 of 57
(6) The Board shall, within one hundred and twenty days of the end of each financial year,
together with the annual report of the Commission under sub-section (2), send a copy of the statement
of accounts of the Commission certified by the auditors and a copy of the auditors' report to the Federal
Government which shall cause them to be published in the official Gazette and laid before both Houses
of the Majlis-e-Shoora (Parliament) within two months of their receipt.
26. Power to obtain finance, borrow money and receive grants.—(1) The Commission may,
from time to time, and with the approval of the Federal Government, obtain finance or borrow money
from sources within Pakistan or from abroad, as the case may be, with such rate of return, profit, mark-
up or interest payable thereon, as the case may be, and for such period and upon such terms as to the
time and method of repayment and otherwise, in respect of any sums required by the
Commission for meeting any of its obligations or performing any of its functions.
(2) The Commission may also accept 1[* * *] and with the approval of the Federal Government,
grants from entities both domestic and international, including multilateral agencies.
27. Investment.—(1) Subject to sub-section (2), the Commission may, in so far as its moneys
are not required to be expended under this Act, invest in such manner as set out in section 20 of the
Trusts Act, 1882 (II of 1882).
(2) The Commission shall not invest its money in listed securities or any derivative thereof
whether listed or not.
1
[28. Bank Accounts. The Commission may 2[* * *] open and maintain its accounts in rupees
or in any foreign currency at such scheduled banks as it may from time to time determine.]
PART VIII
3[INSPECTION, INVESTIGATION AND ENFORCEMENT]
4
[28A. Inspection.—(1) For the purpose of ascertaining whether a person who is, or at any
time has been, a regulated person is complying with or has complied with any provision or requirement
of this Act or any administered legislation, or the terms and conditions of licence or registration, the
Commission may from time to time inspect any record or document relating to any regulated activity.
(2) The Commission may authorize in writing one or more of its employees to exercise the
powers of the Commission under this section.
(3) In the exercise of his powers under this section, an authorized person may―
(a) require the regulated person, or any concerned person, whom he believes is in
possession of or has under his control any record or document referred to in
sub-section (1), to produce that record or document before him;
(b) make inquiries of a regulated person, or any other person whom he has
reasonable cause to believe has information relating to any record or document
referred to in sub-section (1), concerning any such record or document or
concerning any transaction or activity which was undertaken in the course of,
or which may affect, the business conducted by the regulated person; and
(c) inspect and make copies of, or take extracts from, and where necessary take
possession of, such documents.
1
Omitted and subs., by Ord. 55 of 2000, Ss.11-12.
2
Omitted by Act VII of 2003, s. 11.
3
Subs. by Act XXXVI of 2016, s. 12 and 14.
4
Ins. and Subs., by Act XXXVI of 2016, s.12 and 13
Page 24 of 57
(4) For the purpose of an inspection under this section, the regulated person or other person
mentioned in sub-section (3) shall afford an authorized person access to the records or documents as
may be required for the inspection and shall produce before the authorized person such records or
documents as may be required.
(5) Any person who, without reasonable excuse, fails to comply with a requirement imposed
on him by an authorized person under sub-section (3) commits an offence under this Act and shall be
punishable with imprisonment of either description which may extend to three years or with fine which
may extend to two hundred million rupees or with both.]
1[29. Investigation and proceedings by the Commission.—(1)Where the Commission, either
on its own motion or on the basis of any information received, authorize one or more of its employees
or one or more other persons to investigate, whether—
(a) an offence or a contravention has been committed by any person under this Act
or any administered legislation or a subordinate legislation;
(b) a regulated person has been engaged in committing fraud, misfeasance or other
misconduct in carrying on a regulated activity; or
(c) the manner in which a regulated person has engaged or is engaging in his
regulated activity is not in the interest of the financial services market or
investors, and submit an investigation report thereof to the Commission, the
Commission shall proceed in the matter in accordance with the provisions of
the Act and the administered legislation:
Provided that where any special procedure regarding investigation or inquiry is provided in the
administered legislation the Commission may adopt such special procedure in addition to the
procedure provided in this Act.
(2) Any concerned person, who is reasonably believed or suspected by the investigator to have
in his possession or under his control any record or document which contains or which is likely to
contain information relevant to an investigation under this section or who is believed or suspected of
otherwise having such information in his possession or under his control, shall—
(a) produce to the investigator, within such time and at such place as the
investigator requires in writing, any record or document specified by the
investigator which is, or may be, relevant to the investigation and which is in
his possession or under his control;
(b) if required by the investigator give the investigator an explanation for or further
particulars of any record or document produced under clause (a);
1
Subs. by Act XXXVI of 2016, s. 12 and 14.
Page 25 of 57
(c) appear before the investigator at such time and at such place as the investigator
requires in writing and answer truthfully and to the best of his ability any
question relating to the matters under investigation as the investigator may put
to him, whether orally or in writing; and
(d) provide to the investigator all assistance in connection with the investigation
which he is reasonably able to give.
(3) Any person who without reasonable cause fails to—
(a) produce any record or document required to be produced under clause (a) of
sub-section (2);
(b) give an explanation or further particulars as required under clause(b) of
subsection (2);
(c) appear before the investigator as required under clause (c) of subsection (2);
(d) answer a question put to him by the investigator under clause (c) of sub-section
(2) or in answering the question says anything which he knows to be false or
misleading in a material particular or who in so answering recklessly makes a
false statement; or
(e) comply with clause (d) of sub-section (2), commits an offence under this Act
and shall be punishable with imprisonment of either description which may
extend to three years or with fine which may extend to two hundred million
rupees or with both.
(4) The Commission may, for the purposes of investigation under this Act or any administered
legislation, also seek assistance of any other investigating agencies, bureau, local police and
administration, statutory bodies, banks and other relevant entity, who shall provide such assistance to
the Commission.]
30. Powers of the investigating officers of the Commission.—(1) An investigating officer
carrying out an investigation or inspection may, only after the written order of the Commission signed
by 1[a commissioner, or an officer, authorized in this behalf] enter any place or building—
(a) to inspect and make copies of or take extracts from any book, minute book,
register or document; and
(b) where he has reason to believe that an offence has been committed under this
Act 1[any administered legislation] or any other law in respect of which the
Commission has power to make investigation or inspection, to search for, seize,
take possession of and detain any object, article, material, thing, accounts book
or other document, including any travel or other personal document which may
be used as evidence.
1
Subs. by Act XXXVI of 2016, s. 15.
Page 26 of 57
1
[(1A) The investigator shall, for the purposes of investigations, have the same powers as are
vested in a civil court under the Code of Civil Procedure, 1908 (Act V of 1908), while trying suit in
respect of the following matters, namely:—
(a) summoning and enforcing the attendance of any witness and examining him on
oath or affirmation;
(b) compelling the discovery or production of any document, record or other
material object;
(c) receiving evidence on affidavit; and
(d) issuing commissions for the examination of witnesses and documents.
(1B) In addition to sub-section (3), any person who contravenes the requirements of clause (a),
(b) and (c) of sub-section (IA), the investigator may, after prior written approval of the Commission,
make an application to the Court for attachment of property, both movable and immovable, or require
him to furnish security for his appearance or any other order as the Court deems appropriate and
necessary and in addition, the Commission may pass any order under Chapter XIA on a report of the
investigation officer.
(1C) Notwithstanding anything contained in Qanun-e-Shahadat Order, 1984 (P.O. 10 of 1984)
all evidence collected though modern electronic devices and such other techniques shall be admissible
in the court of law.
(1D) Any proceeding before the investigator shall be deemed to be a judicial proceeding within
the meaning of sections 193 and 228 of the Pakistan Penal Code, 1860 (Act XLV of 1860) and in case
of any contravention thereof the Commission may file a complaint in the Court of Sessions.]
(2) When an order has been made under sub-section (1) an investigating officer of the
Commission may, by notice in writing, require any person to produce before him such books, registers
or documents as are in the custody or under the control of that person.
(3) A person who—
(a) fails deliberately to produce any such books, registers or documents as are
required by the Commission or an investigating officer; or
(b) obstructs or hinders an investigating officer while exercising any of the powers
under this section;
shall be guilty of an offence and shall be liable on conviction to a fine which may extend to one million
rupees or to imprisonment for a term not exceeding one month, or to both.
(4) Any accounts, book or other document seized and taken possession of by the investigating
officer of the Commission under sub-section (1) may be inspected by any person if such person is
entitled to inspect such accounts, book or document under this Act, and if so authorized to do in writing
by the Commission.
1
Ins. by Act XXXVI of 2016, s. 15.
Page 27 of 57
(5) Sub-section (1) shall not be construed as limiting or affecting any similar powers conferred
on any person under any, other law.
(6) Any person aggrieved by the conduct of an investigating officer may lodge a complaint in
respect thereof to the Commission.
(7) The Commission shall, within fifteen days of receipt of the complaint under sub-section (6)
commence a hearing to determine the veracity of such complaint in accordance with such procedure
as may be prescribed by rules made by the Federal Government.
31. Forcible entry.—(1) For the purpose of exercising his powers under sub-sections (1) and
(2) of section 30, an investigating officer of the Commission may enter any place or building by force,
if necessary 1[in such form and manner as may be prescribed by the Federal Government through
rules].
(2) Notwithstanding anything contained in sub-section (1), no investigating officer of the
Commission shall enter any premises by the use of force without a written order of the Commission
signed by 1[a Commissioner authorized in this behalf].
(3) If, on enquiry conducted in accordance with the rules it is found that the exercise by an
investigating officer of his power under sub-section (2) was vexatious, excessive or with mala fide
intent such officer shall be dismissed from service, and shall be guilty of an offence punishable with
fine which may extend to five hundred thousand rupees and imprisonment for a term not exceeding
one year.
(4) Whenever a criminal Court imposes a fine under sub-section (3) it shall, when passing
judgment, order that a sum equal to the whole or any part of the fine recovered, be paid to the person
on whose complaint the investigating officer was convicted, and in case the fine is not recovered the
sum shall be paid out of the Fund.
(5) Any sum paid under sub-section (4) shall be without prejudice to the right of the aggrieved
person to avail any other remedies available to him under the law but at the time of awarding
compensation in any subsequent proceedings relating to the same matter the Court shall take into
account any sum recovered from the convict and paid to the aggrieved person.
2
[31A. Power of the Commission to call for information.—(1) Notwithstanding anything
contained in any other law, the Commission or authorized investigating officer may, by notice in
writing, require any person including financial institution to furnish it with such documents or
information as it may require during the course of inquiry, inspection or investigation under this Act
or any administered legislation within such time and verified in such manner as it may specify.
(2) The duty to supply information under this section applies notwithstanding any other
enactment or law in Pakistan including Banking Companies Ordinance, 1962 (LXII of 1962).
(3) Any person who refuses to provide information required by the Commission under
sub-section (1) shall be guilty of an offence and shall be liable on conviction to a fine which may
extend to one million rupees or to imprisonment for a term not exceeding three years, or with both.]
1
Ins, subs. by Act XXXVI of 2016, s. 16.
2
Ins. by Act XXXVI of 2016, s. 17.
Page 28 of 57
32. Power to call for examination.—(1) For the purpose of sub-section (1) of section 29, the
Commission may by notice in writing require any person acquainted with the facts and circumstances
of the case to appear before an investigating officer authorized by it in this regard. Such person shall
be examined orally and any statement made by such person during the course of the examination shall
be reduced into writing.
(2) Such person shall be bound to answer all questions relating to such case put to him by the
investigating officer, as the case may be, and to state the truth, whether or not the statement is made
wholly or partly in answer questions.
(3) Subject to sub-section (4), a statement made by any person under this section shall be taken
down in writing and signed by the person making it or affixed with his signature and thumb print, as
the case may be, after it has been read to him and after he had been given an opportunity to make any
correction he may wish.
(4) Where the person examined refuses to sign and affix his thumb print on the statement, the
investigating officer of the Commission shall endorse thereon under his hand the fact of such refusal
and the reason therefor, if any, stated by the person examined.
(5) Any person who:—
(a) fails to appear before an investigating officer of the Commission as required
under subsection (1);
(b) refuses to answer any question put to him by an investigating officer of the
Commission as required under subsection (2); or
(c) knowingly furnishes to an investigating officer of the Commission information
or statement that is false or misleading in any material particular;
(d) wilfully refuses to obey or disregards any lawful order of the Commission
1
[under this Act or any other law administered by the commission];
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding one hundred
thousand rupees or to imprisonment for a term not exceeding one year, or to both.
1
[32A. Implementation of orders of the Commission. The Commission may issue such
directions as may be necessary or expedient to give effect to its orders or to prevent abuse of its process,
including but not limited to, seeking the assistance of the local administration or Police who shall be
bound to provide such assistance.]
2
[32B. Review.—(1) Any order passed by the Commission shall be subject to review by the
Commission on its own motion or on application made to it within thirty days from the date of such
order.
(2) Any person aggrieved by an order of the Appellate Bench from which an appeal is allowed
under section 34 but no appeal has been preferred, may file an application for review within thirty days
from the date of such order.]
1
Ins. by Act I of 2008, s. 15.
2
Ins. by Act XXXVI of 2016, s. 18.
Page 29 of 57
33. Appeal to the Appellate Bench of the Commission.- 1[(1) Except as otherwise provided any
person aggrieved by an order of the Commission passed by one Commissioner or an officer authorized
in this behalf by the Commission, may within thirty days of the order, prefer an appeal to an Appellate
Bench of the Commission constituted under sub-section (2):
Provided that no appeal shall lie against:-
(a) an administrative direction given by a Commissioner or an officer of the
Commission;
(b) an order passed in exercise of the powers of revision or review;
(c) a sanction provided or decision made by a Commissioner or an officer of the
Commission to commence legal proceedings 2[* * *] ; and
(d) an interim order which does not dispose of the entire matter.]
(2) The Commission shall constitute an Appellate Bench of the Commission comprising not
less than two Commissioners to hear appeals under sub-section (1).
(3) If any Commissioner who is included in the Appellate Bench has participated or been
concerned in the decision being appealed against the Chairman shall nominate an other Commissioner
to sit in the Bench to hear that appeal.
3
[(3A) Any clerical or arthematic mistakes in an order or error arising therein from any
accidental slip or omission may at any time be corrected by the Appellate Bench on its own motion or
on an application made to it by any party.]
(4) The form in which an appeal is to be filed and the fees to be paid therefor and other related
matters shall be prescribed by rules.
34. Appeal to the Court.—(1) An appeal shall lie to the Court referred to in Part II of the
Ordinance in respect of an order of the Commission comprising two or more Commissioners or the
Appellate Bench 3[or order made under sub-section (2) of section 32B].
(2) The appeal under sub-section (1) shall be filed within sixty days of the date of the decision
and shall be accompanied by a fee of one hundred rupees.
3
[(3) The Court may, on an appeal made to it under sub-section (1), accept, set aside or vary
the order referred to in sub-section (1) or make such other order as the interest of justice require.
(4) The Court shall at the stage of admission of an appeal, or at any time thereafter on
application of the aggrieved person with due notice to the parties, decide by means of a reasoned order
whether the appeal is to be admitted in part or in whole depending on the facts and circumstances of
the case:
Provided that the admission of the appeal shall not per se operate as a stay and nor shall any
stay be granted therein unless the Commission has been given an opportunity of being heard.
1
Subs. by Act IV of 2007, s. 17.
2
Omitted. by Act I of 2008, s. 15.
3
Ins. by Act XXXVI of 2016, s. 19-20.
Page 30 of 57
(5) Notwithstanding anything contained in any other law, the hearing of appeal may continue
day to day, unless sufficient cause has shown by the parties jointly or severally which is beyond the
control of the parties, the Court may adjourn the hearing for maximum of two dates and such
adjournment may not be more than fifteen days at any one time or for more than thirty days in all.]
PART IX
CONFIDENTIALITY OF INFORMATION
35. Obligation of confidentiality.—(1) Subject to this section, any person who is or was at
any time—
(a) acting as a Member of the Board, or
(b) engaged as a Commissioner or employee of the Commission, or
(c) authorized to perform or exercise any function or power of the Commission or
any function or power on behalf of the Commission or to render services to the
Commission in the capacity of a consultant or adviser;
shall not, except to the extent necessary to perform his official duties, or in performance or exercise of
such a function or power, either directly or indirectly, make a record of, or disclose to any person, any
information that is or was acquired by him because of having been so appointed, engaged or
authorized, or make use of any such information, for any purpose other than the performance of his
official duties or the performance or exercise of that function or power.
(2) Any person who contravenes sub-section (1) shall be guilty of an offence and shall be liable
on conviction to a fine not exceeding one million rupees or to imprisonment for a term not exceeding
one year or, to both.
(3) The Commission shall take all reasonable measures to protect from unauthorized use or
disclosure the information given to it in confidence in or in connection with the performance of its
functions or the exercise of its powers.
(4) For the purpose of sub-section (1) the disclosure of information as required or permitted by
any law for the time being in force in Pakistan or any other jurisdiction shall be taken to be authorized
use and disclosure of the information.
(5) For the purposes of sub-section (1), the disclosure of information by a person for the
purposes of—
(a) performing his functions as—
(i) a Commissioner or employee of the Commission, or
(ii) a person who is acting as a Commissioner or employee or who is
authorized to perform or exercise a function or power of, or on behalf
of, the Commission, or
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(b) The performance of functions or service by the person by way of assisting a
Commissioner or a delegate of the Commission, shall be taken to be authorized
use and disclosure of the information.
(6) Where the Chairman is satisfied that particular information—
(a) will enable or assist the Board to perform or exercise any of its functions or
powers;
(b) will enable or assist the Government, or an agency of the Government to
perform a function or exercise a power; or
(c) will enable or assist the Government, or an agency of the Government, of a
foreign country to perform a function, or exercise a power, conferred by a law
in force in that foreign country;
the disclosure of the infomation to such persons by a person whom the Chairman authorizes for the
purpose shall be taken to be authorized use and disclosure of the information.
(7) The Chairman may impose conditions to be complied with in relation to information
disclosed under sub-section (6).
(8) The disclosure of information to a body specified in sub-section (9) is authorized use and
disclosure of the information if:—
(a) the Chairman is satisfied that the information will enable or assist the body to
monitor compliance with, enforce, or perform functions or exercise powers
under―
(i) any law for the time being in force;
(ii) the rules and regulations (including the listing rules if any), of the body
; and
(b) the disclosure is made by a person authorized by the Chairman for the purpose.
(9) A body to whom disclosure of information under sub-section (8) may be authorized is—
(a) a Stock Exchange; or
(b) a clearing house; or
(c) a central depository; or
(d) such other body corporate as the Federal Government may by notification in the
official Gazette specify for the purposes of this sub-section.
(10) The Chairman may impose conditions to be complied with by the body and its officers,
employees and agents in relation to the information disclosed to it under sub-section (8) and persons
in respect of whom conditions are imposed shall be bound to comply with them.
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(11) If information is disclosed to a body under sub-section (8) the body, or any officer,
employee or agent of the body shall not, without the written consent of the Chairman:
(a) disclose the information to a person who is not an officer, employee,
professional adviser or agent of the body corporate; or
(b) use the information otherwise than for the purpose of monitoring compliance
with, enforcing, or performing functions or exercising powers under:
(i) the Ordinance and any other law for the time being in force; or
(ii) the rules and regulations (including the listing rules, if any), of the body
corporate.
(12) The Chairman may delegate all or any of his functions and powers under sub-sections (6),
(7), (8), (10) or (11) to a Commissioner or an employee.
(13) Nothing in any of sub-sections (4), (5), (7) and (8) shall limit:
(a) anything else in any of those subsections; or
(b) what may otherwise constitute, for the purposes of sub-section (1), authorized
use or disclosure of information.
36. Permitted disclosure. Nothing in section 35 shall preclude a person from:
(a) producing a document to a Court in the cause of criminal proceedings or in the
course of any proceedings under this Act, the Ordinance or any other law for
the time being in force.
(b) disclosing to a Court in the course of any proceedings referred to in clause (a)
any matter or thing, that came under his notice in the performance of official
duties or in the performance of a function or the exercise of a power referred to
in that section ; or
(c) producing a document or disclosing information to a person to whom, in the
opinion of the Commission, it is in the public interest that the document be
produced or the information be disclosed; or
(d) producing a document or disclosing information that is required or permitted by
any law for the time being in force in Pakistan or any other jurisdiction to be
produced or disclosed, as the case may be; or
(e) producing a document or disclosing information to the Commission.
Page 33 of 57
1[PART IXA
POWERS OF INTERVENTION BY COMMISSION
36A. Scope of powers under this Part.—(1) The powers conferred on the Commission under
this Part may be exercised in relation to any regulated person if it appears to the Commission that —
(a) the exercise of the powers is desirable for the protection of investors or is in the
interest of the financial services market; or
(b) a regulated person is not a fit and proper person; or
(c) a regulated person has contravened or failed to comply with any provision of or
any requirement under this Act or any administered legislation or, in purported
compliance with any such provision or requirement, has furnished the
Commission with information that is false, inaccurate or misleading.
(2) In exercising the powers conferred by this section or secjion 36B, the Commission may be
entitled to rely on the findings of an inspection conducted under section 28A or the content of any
report of investigating officer received under section 29.
(3) The powers conferred on the Commission by this Part may be exercised in relation to a
person whose registration or license has been suspended or revoked or has expired whether or not the
suspension or revocation is the subject of appeal.
36B. Restriction of business.—(1) For the purposes of section 36A, the Commission may
prohibit a regulated person from doing any one or more of the following, namely:—
(a) entering into transactions—
(i) of a specified description or other than of a specified description; or
(ii) in specified circumstances or other than in specified circumstances; or
(iii) to a specified extent or other than to a specified extent;
(b) soliciting business from persons of a specified description or from persons other
than of a specified description; or
(c) carrying on business in a specified manner or other than in a specified manner.
(2) A prohibition under this section may relate to transactions entered into in connection with
or for the purposes of the regulated activity or to other business that is carried on in connection with
or for the purposes of any such regulated activity.
1
Ins. Part-IXA, IXB and IXC, by Act XXXVI of 2016, s. 21.
Page 34 of 57
PART IXB
SELF REGULATORY ORGANIZATION
36C. Self-regulatory organizations. A person who wishes to carry on activities as self-
regulatory organization may apply to the Commission for registration and the Commission may, where
it deems appropriate in the public interest or for the protection of investors, register any entity as a
self-regulatory organization in such form and manner and subject to such terms and conditions as may
be specified including but not limited to following, namely:—
(a) it is a company licensed by the Commission under section 42 of the Ordinance;
(b) it has specified in its memorandum of association as its main objects the
discharging of functions of selfregulatory organization;
(c) it has necessary infrastructure, adequate office space, equipments, experienced
man power and technical aspects, financial resources, policies, procedures,
systems and controls to effectively and efficiently discharge its functions and
responsibilities;
(d) its directors and senior management officials fulfill the fit and proper criteria as
may be specified;
(e) at-least one-half of the number of its directors are independent directors and in
order to determine the independent status of a director, the requirements
prescribed in the code of corporate governance as specified by the Commission
from time to time shall be followed;
(f) the chairman of the board of directors of that company shall always be an
independent director;
(g) it has paid up capital net of losses of not less than such amount as may be
specified; and
(h) any other conditions as may be spedified.
Explanation.— For the purpose of this section, senior management officials shall include, chief
executive officer or managing director, deputy managing director or chief operating officer and chief
regulatory officer or holder of such position by whatever name called.
36D. Registration of self-regulatory organizations.—(1) The application for registration as
a self-regulatory organization shall be made in such form and manner and subject to such fee as may
be specified.
(2) Upon receipt of application under sub-section (1), the Commission may grant certificate of
registration after making such inquiries and after obtaining such information as it considers necessary,
including but not limited to the following, namely:—
(a) applicant fulfills the eligibility criteria;
Page 35 of 57
(b) applicant has the ability to efficiently handle its functions as self-regulatory
organization and its obligations under this Act and regulations made by the
Commission;
(c) the regulations of the applicant contain satisfactory provisions for the matters
specified in this section;
(d) it shall be in the interest of financial services market and the public to grant
registration to the applicant; and
(e) any other condition as may be specified.
(3) The certificate of registration as self-regulatory organization shall be valid for a period of
five years and may be renewed by the Commission subject to fulfillment of such conditions as may be
specified.
(4) Self-regulatory organization shall be responsible to perform the functions which may
include any or all of the following, namely:—
(a) effective training and education of the members of self-regulatory organization
and investors in general;
(b) conducting examinations and providing certifications to its members and
investors in general;
(c) providing research and development assistance to its members and investors in
general;
(d) conducting the grading of its members with respect to their compliance with the
applicable law and other norms as may be specified;
(e) providing information to the investors regarding general and specific risks of
financial services market, information pertaining to its members and other
information useful for taking informed investment decisions and protecting the
interest of investors; and
(f) any other functions as may be specified.
(5) It shall be responsibility of the self-regulatory organization to—
(a) specify code of conduct for its members and take measures for ensuring
compliance thereof;
(b) implement mechanism for monitoring and supervising activities of its members
and ensuring compliance with applicable laws;
(c) implement mechanism for inspection of its members on regular basis;
(d) take disciplinary action against its members in cases of violation of code of
conduct and other applicable law;
Page 36 of 57
(e) treat all its members in an equitable manner and must ensure that no member
gains unfair advantage to other member as a result of oversight activities of
selfregulatory organization;
(f) promptly inform the Commission regarding any non-compliance of laws by its
members;
(g) act in good faith and take measures to avoid conflict of interest in conduct of its
duties and functions;
(h) submit annual report to the Commission which shall contain such information
as may be specified;
(i) comply with all the requirements of this Act, regulations made thereunder and
directions given by the Commission from time to time;
(j) comply with the code of corporate governance specified by the Commission;
(k) submit periodical returns to the Commission in the manner and frequency
specified;
(I) provide such assistance to the Commission as and when required, including the
furnishing of such returns and the provision of such information relating to its
operations or required under this Act or any administered legislation and
applicable rules and regulations, directions, notifications, etc.;
(m) extend full cooperation to the Commission in relation to any inspection or
investigation against its members and in ensuring compliance with the law by
its members; and
(n) perform such other duties and responsibilities as may be specified.
36E. Regulations of self-regulatory organization.—(1) Self-regulatory organization shall
make regulations subject to prior approval of the Commission and such regulations shall contain
following provisions, amongst others,—
(a) for the protection of investors;
(b) for manner of admission of its members;
(c) code of conduct for the members;
(d) for monitor conduct of its members;
(e) relating to discipline of a member who contravenes its regulations or the
provisions of this Act or any administered legislation and may provide for fine,
suspension, expulsion, limitation of activities, functions or operations;
(f) for specifying the procedure for disciplinary proceedings;
Page 37 of 57
(g) right of appeal of member of self-regulatory organization against any
disciplinary action by the self-regulatory organization including manner and
procedures in connection therewith;
(h) for preventing fraudulent, deceptive and manipulative acts and practices and
promoting fair trading practices;
(i) obligation of members to provide information to the self-regulatory
organization in the manner and frequency specified;
(j) manner and frequency of submission of returns and information to the
selfregulatory organization by its members;
(k) arbitration mechanism in relation to any dispute between its members or
between members and their clients;
(I) for maintenance of books and records by the selfregulatory organization;
(m) criteria for appointment of auditors of self-regulatory organization and the
content of audit report;
(n) for confidentiality of information available with the self-regulatory organization
and its officers;
(o) for inspection of members including audit by independent auditors to determine
compliance with the law and provide opinion on such matters as may be
specified;
(p) for fair treatment to its members and any person who applies for membership;
and
(q) any other matters as may be specified.
(2) The Commission may approve regulations of self-regulatory organization with or without
modification or on its own motion, make or amend the regulations after giving due notice to the self-
regulatory organization.
(3) The Commission may, by notice in writing served on a self-regulatory organization, require
it to —
(a) make regulations specified in the notice within the period specified; or
(b) amend regulations referred to in the notice in the manner and within the period
specified in the notice.
(4) Where the Commission is satisfied that a self-regulatory organization has not complied
with a requirement referred to in sub-section (3) within the period specified in the notice, the
Commission may make or amend the regulations and the regulations so made or amended shall be
deemed to have been made or amended by the self-regulatory organization and shall have effect
accordingly.
Page 38 of 57
(5) Self-regulatory organization shall only admit the regulated persons which are granted a
licence by the Commission or which are registered with the Commission under the laws administered
by the Commission:
Provided that the Commission may declare a class of persons connected with the financial
services market who may be admitted by a self-regulatory organization as its members.
36F. Maintenance and inspection of records.—(1) A self-regulatory organization shall —
(a) make and maintain such records in such form and manner and for such period
as may be specified;
(b) file with the Commission any report specified by the Commission in the form
and manner as may be specified; and
(c) appoint auditor with the prior approval of the Commission to express opinion
on such matters as may be specified.
(2) The Commission may in writing at any time appoint one or more persons to —
(a) inspect books of accounts, other records and documents of the self-regulatory
organization or its members and the self-regulatory organization or the member,
as the case may be, shall extend full cooperation to the persons so appointed by
the Commission and produce all accounts, records and documents as may be
required by person so appointed; and
(b) prepare such financial or other reports as the Commission requires.
36G. Powers of the Commission to issue directions to self-regulatory organization.—(1)
Without prejudice to the powers conferred by section 40B the Commission may issue directions to
self-regulatory organization of a general or specific nature where the Commission considers it
necessary or expedient, in the public interest or for the protection of investors or in the interest of
financial services market.
(2) Where the self-regulatory organization contravenes any provision of this Act or any
administered legislation or any rules or regulations made thereunder or fails to comply with any
direction of the Commission, the Commission may, after providing a reasonable opportunity of being
heard,—
(a) remove the chief exedutive officer, any director or officer of the self-regulatory
organization from office;
(b) impose a penalty of such sum which may extend to fifty million rupees; or
(c) suspend or cancel the registration of the self-regulatory organization.
Page 39 of 57
PART IXC
AUDIT OVERSIGHT BOARD
36H. Definitions. In this Part,—
(a) “auditor” means a chartered accountant within the meaning of Chartered
Accountants Ordinance, 1961 (X of 1961) being a person qualified to be
appointed as auditor of a company under section 253 of the Ordinance;
(b) “audit firm” means a firm of chartered accountants in practice organized as
partnership under the Partnership Act, 1932 (IX of 1932) or a sole proprietary
firm being an auditor;
(c) “audit oversight board” or “AOB” means the independent audit oversight board
established under section 36;
(d) “employee” means any officer or employee of AOB;
(e) “fund” means fund established under this Part;
(f) “Institute” means the Institute of Chartered Accountants of Pakistan established
under the Chartered Accountants Ordinance, 1961 (X of 1961);
(g) “member AOB” means the member of AOB;
(h) “nominating committee” means committee comprising following ex-officio
members, namely:—
(i) Secretary to the Government of Pakistan, Finance Division;
(ii) the Chairman of the Commission;
(iii) the President of the Institute;
(iv) the Governor State Bank of Pakistan; and
(v) one member to be co-opted by the ex-officio members;
(i) “public interest company” means such company or body corporate as may be
notified by the Commission;
(j) “quality assurance board” or “QAB” means the quality assurance board
constituted by the Institute;
(k) “registered audit firm” means an audit firm registered with AOB; and
(I) “specified” means specified through regulations made under section 36Z.
Page 40 of 57
36 I. Establishment of AOB.—(1) There is hereby established an independent audit oversight
board to function in the public interest.
(2) AOB shall have perpetual succession and common seal and can sue and be sued in its own
name.
(3) AOB shall perform such functions as assigned to it under this Part and shall have all powers
incidental and ancillary thereto.
36J. Members of AOB.—(1) AOB shall comprise seven members including its chairman.
(2) The members and the chairman of AOB shall be appointed by the Federal Government on
the recommendation of the nominating committee.
(3) A member AOB shall be a person who possesses relevant qualification such as a degree,
recognized by the Higher Education Commission, in accountancy, business, finance, law or economics
and experience of audit, regulation of auditors or corporate law or having been on the board of directors
or in the senior management of public interest companies.
(4) The nominating committee shall formulate procedures for selection of members following
due process, including interviews of the potential candidates, before recommending them to the
Federal Government for appointment.
(5) The quorum of the meeting of AOB shall not be less than four members.
(6) The members of AOB, including the chairman, shall be paid such remuneration and
allowances as may be notified by the Federal Government on the recommendation of the nominating
committee.
(7) A member of AOB shall be appointed for an initial term of three years and shall be eligible
for reappointment for another non-renewable term of three years.
(8) The nominating committee shall determine the appointment procedure and system of
performance evaluation of the members of AOB and its constitution and reconstitution in the following
manner, namely:—
(a) appointment of seven members on first constitution of AOB shall be made for
a term of three years;
(b) after expiry of three years on first constitution of AOB, four members of AOB,
selected on random ballot out of the then existing members, shall continue for
further term of three years and the remaining members shall stand retired and
cease to hold the office, provided that they have completed their first term of
three years; and
(c) any vacancy arising at any time shall be filled in accordance with the provisions
of this Part for a term of three years reckoning from the date of the appointment.
(9) No act, proceeding or decision of AOB shall be invalid by reason only of the existence of
a vacancy in, or defect in the constitution of AOB.
Page 41 of 57
36K. Functions of AOB. Notwithstanding anything contained in any other law, AOB shall
perform the following functions, namely:—
(a) to register audit firms, which carry out or intend to carry out audit of public
interest companies in the manner laid down in subsection (1) of section 36T;
(b) to deregister audit firms in the manner laid down in sub-section (2) of section
36T;
(c) to undertake comprehensive review and examination of the QAB work and
independently assess the appropriateness of the quality control review
framework and take such actions as deemed necessary;
(d) to oversee and review policies, procedures, programs of QAB for ensuring an
effective oversight of quality of audit of public interest companies and to specify
any improvement required in QAB's policies, procedures and systems;
(e) to direct the Institute for making such changes in the quality control review
framework as it considers necessary or expedient for the purposes of this Part;
(f) to ensure that the auditing standards adopted by the Institute conform to the
international standards as issued by International Auditing and Assurance
Board;
(g) to conduct inspections and inquiries in respect of matters related to this Part and
regulations made hereunder; and
(h) to coordinate with relevant authorities including the Commission, State Bank of
Pakistan and the Institute in formulating and implementing strategies for
enhancing the reliability of quality and effectiveness of audits of public interest
companies.
36L. Appointment of employees of AOB.—(1) The AOB may, from lime to time, employ
persons for AOB who shall be paid such remuneration and allowances as may be determined by AOB.
(2) There shall be a full time chief executive officer of AOB with functions as may be
prescribed.
36M. Disclosure of interest.—(1) A member of AOB having directly or indirectly, by himself
or through a member of his immediate family, any interest in any matter directly or indirectly under
discussion by AOB shall disclose to the AOB the fact and nature of his interest.
(2) A disclosure under sub-section (1) shall be recorded in the minutes of the meeting of AOB
and, after the disclosure, the member having an interest in the matter —
(a) shall neither take part nor be present in any deliberation or decision of AOB;
and
(b) shall be disregarded for the purpose of constituting a quorum of AOB.
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(3) Any member of AOB who fails to disclose his interest as provided under sub-section (1)
commits an offence and shall be liable to be removed there for by the Federal Government in
accordance with the prescribed procedure.
36N. Disqualification of members. No person shall be appointed or continue as a member of
AOB if he—
(a) has been convicted of an offence involving moral turpitude;
(b) has been or is adjudged insolvent;
(c) is incapable of discharging his duties by reasons of physical, physiological or
mental unfitness and has been so. declared by a registered medical practitioner
appointed by the Federal Government;
(d) being a member, absents himself from three consecutive meetings of AOB,
without leave of AOB;
(e) fails to disclose any conflict of interest at or within the time provided for such
disclosure by or under this Act or contravenes any of the provisions of this Act
pertaining to unauthorized disclosure of information; or
(f) is found guilty of misconduct under section 36Q.
36O. Removal, resignation and vacancies.—(1) Subject to sub-section (2), appointment of
any member of AOB may, at any time, be revoked and he may be removed from his office subject to
such procedure as may be specified.
(2) A member of AOB may at any time resign his office by a written notice addressed to the
chairman of AOB.
(3) The office of a member of AOB shall ipso facto stand vacated if he dies.
(4) Any vacancy created as a result of removal, resignation or death of a member of AOB shall
be filled on the recommendation of the nominating committee.
36P. Fund of AOB.—(1) For the purposes of this Part, there is hereby established, a fund to
be managed and controlled by AOB in such form and manner as may be prescribed by regulations.
(2) The fund under sub-section (1) shall consist of —
(a) such sums as the Federal Government may from time to time grant;
(b) voluntary contributions by the stakeholders;
(c) grants of monies and sums raised or borrowed by AOB for the purposes of
meeting any of its obligations or discharging any of its duties;
(d) fee for registration of the audit firm under this section;
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(e) fee and charge from the public interest company required to be audited by a
registered audit firm;
(f) earnings from investments, properties or other assets owned by AOB; and
(g) any other grant or donations or amount permitted by the Federal Government.
(3) The fund shall be used for the purposes of AOB's own affairs and may also be utilized for
the affairs of QAB.
36Q. Conduct of business of AOB. AOB shall observe such procedure as may be specified to
conduct its business.
36R. Accounts and Audit.—(1) AOB shall keep proper books of accounts and records in such
form and manner as may be specified.
(2) AOB shall send audited financial statements along with auditors report for each financial
year to the Federal Government within such time and in such a manner as may be specified.
36S. Annual report.—(1) AOB shall, within six months on the close of its financial year or
such later time as allowed by the Federal Government, submit to the Federal Government and publish
an annual report including its performance and future plans and such contents and information as may
be prescribed.
(2) AOB shall ensure that the annual report is accompanied by such other information and
statements as may be prescribed.
36T. Registration and deregistration of audit firm.—(1) An audit firm shall be entitled to
be registered on the recommendation of QAB in accordance with the quality control review
framework:
Provided that all the firms having satisfactory rating at the time of commencement of this Act
shall be deemed to be registered.
(2) AOB, on its own motion or on the recommendation of QAB, may order deregistration of
the audit firm from the register maintained under section 36W. For this purpose AOB shall rely on the
work and inspections carried out by QAB or its own inspection.
36U. Inspection and proceedings by AOB.—(1) AOB on a complaint, suo moto or on
reference made by the Commission or State Bank of Pakistan may conduct inspection of records of
QAB, in respect of an audit firm registered under this Part, to ensure compliance of this Part or
regulations made hereunder:
Provided that, if AOB is not satisfied with the work of QAB, it may directly conduct inspection
of records of audit firm and the public interest company.
(2) For the purposes of sub-section (1), AOB or any person authorized in this behalf shall have
the same powers as are vested in the civil court under the Code of Civil Procedure, 1908 (Act V of
1908), while trying a suit, in respect of the following matters, namely:—
Page 44 of 57
(a) discovery and production of books of account and other documents, at such
place and at such time as may be specified;
(b) summoning and enforcing the attendance of persons and examining them on
oath or affirmation;
(c) inspection of any books, registers and other documents of any person referred
to in clause at any place;
(d) issuing commissions for examination of witnesses or documents; and
(e) receiving evidence on affidavit.
36V. Appeal to the Court.—Any person aggrieved by an order of AOB may file an appeal
before the Court, within sixty days of the order of AOB.
36W. Register of audit firms.—AOB shall keep and maintain register of firms authorized to
carry out audit of public interest companies in such form and manner as may be specified.
36X. AOB may seek assistance.—AOB may seek such assistance from the Commission, State
Bank of Pakistan or Institute as it reasonably require for the performance of its duties and functions
under this Part.
36Y. Registration and supervision fees.—AOB shall specify fee for the registration of
auditors of public interest companies, supervision fee for the public interest companies and such others
as specified.
36Z. Power to make regulations.—AOB may make regulations for the purposes of this Part.
36AA. Power to give directions, circulars, code, guidelines etc.—AOB may issue such
directives, circular, code, guidelines or policy statements as it considers appropriate to carry out the
purposes of this Part.
36BB. Power to call for information.—For the purposes of discharging its functions the AOB
shall be empowered to seek such information from QAB, audit firms and public interest companies or
from any other person, as deemed necessary by it.
36CC. Penalty, sanctions or revocation of registration.—(1) Subject to sub-section (2), if
an audit firm fails to comply with the requirement of this Part or any regulations made there-under, or
if so recommended by the QAB based upon its findings, AOB may after providing opportunity of
hearing,—
(a) impose penalty which may extend to five million Rupees;
(b) impose following sanctions;
(i) such audit firm may be barred from engaging itself as auditor of the
public interest companies for a minimum period of six months or for
such higher period not exceeding five years as may be decided by AOB;
or
Page 45 of 57
(ii) revoke registration and remove name from the register of auditor of
public interest companies;
(c) reprimand, issue warnings or such other sanctions as deemed necessary or
appropriate under the circumstances; or
(d) publish or place its findings of inspections of registered firms on its website.
(2) The power to impose penalty under sub-section (1) shall be in addition to the power of the
Commission to impose penalty or file compliant for prosecution in respect of an offence specified in
any provisions of the Ordinance relating to the auditors.
(3) AOB shall give opportunity to be heard through show cause notice to the registered audit
firm prior to imposing any penalty, sanctions or revocation of registration under this Part, regulations
and give reasons for its decision.]
_________
PART X
COGNIZANCE AND PROSECUTION OF OFFENCES
1[37. Cognizance of offences.—(1) Notwithstanding anything contained in the Code of
Criminal Procedure, 1898 (Act No. V of 1898) but subject to the administered legislation, no court
other than the court of sessions shall take cognizance of any offence punishable with imprisonment or
imprisonment in addition of fine under this Act or any administered legislation, except on a complaint
by an officer authorized in this behalf by the Commission signed by a Commissioner:
Provided that the Federal Government may, in consultation with the Chief Justice of the
concerned High Court, notify any other court established under any other law presided by sessions
judge or equivalent to take cognizance of any offences under this Act or any administered legislation.
(2) Subject to sub-section (1), in case of transfer of case from court of sessions it will not be
necessary to recall any witness or record any evidence a new that may have been recorded and the
court to which the case is transferred shall continue proceedings from the stage before such transfer.
38. Prosecution of offences by the Commission.—(1) Notwithstanding anything contained
in the Code of Criminal Procedure, 1898 (Act V of 1898) all prosecution of offences against any person
under this Act or the administered legislation, shall be conducted by a special public prosecutor
appointed by the Commission:
Provided that special public prosecutor or advocates appointed by the Commission may
institute or defend cases, appeals, petitions, applications and all other matters before any court
including the High Court and Supreme Court in matters arising out of or in relation to proceedings
under this Act or any administered legislation.
1
Subs. by Act XXXVI of 2016, s. 22.
Page 46 of 57
(2) On receipt of complaint the court shall issue summons as for the attendance of the accused
in the first instance and on failure of the accused to appear before the court, warrant of arrest shall be
issued by the court.
(3) The complaint referred in this section shall mean the report in writing of the investigation
officer stating the facts constituting the offence along with statements of witnesses recorded under
section 32 and copies thereof shall be supplied to the accused free of cost before the commencement
of the trial.
(4) Personal attendance of the officer authorized by the Commission to file a complaint before
the court trying the offence shall not be required during the trial proceedings in the presence of special
public prosecutor referred to in sub-section (1).
(5) The court shall adopt procedure provided for under Chapter XXII-A of the Code of Criminal
Procedure, 1898 (Act V of 1898) in the manner not inconsistent with the provisions of this Act and all
prosecutions before the court under this Act shall be disposed of and the judgment pronounced, as
expeditiously as possible.
(6) The hearing of the matters referred to in sub-section (1) shall not be adjourned except for
sufficient cause to be recorded or for more than fourteen days at one time and court may impose such
cost as it may deems fit.
(7) The court may, for reasons to be recorded, dispense with any procedure in the Code of
Criminal Procedure, 1898 (Act V of 1898) and follow such procedure as it may deem fit in the
circumstances of the case for expeditious disposal of the complaint.]
1[38A. Opportunity of hearing to the Commission in stay matters.—(1) Any court or
authority shall, before granting any injunction, whether temporary or permanent in respect of any
action taken or to be taken by the Commission in pursuance of any power conferred by or under this
Act or any administered legislation or subordinate legislation, provide opportunity of hearing to the
Commission.
(2) No suit or appeal against an order of the Commission or the Appellant Bench shall be
instituted except with prior notice of such proceedings to the Commission to its head office or regional
office, as the case may be, either personally or through courier along-with acknowledgement and copy
of the petition or appeal.]
_____________
PART XI
RULES AND REGULATIONS
39. Power to make rules.—(1) Subject to sub-section (2), the Federal Government may, by
notification in the official Gazette, make rules for all or any of the matters in respect of which it is
required to make rules to carry out the purposes of this Act.
(2) The power to make rules conferred by this section shall be subject to the condition of
previous publication and before making any rules the draft thereof shall be published in the official
Gazette for eliciting public opinion thereon within a period of not less than 2[Thirty] days from the
date of publication.
1
Ins. by Act XXXVI of 2016, s. 23.
2
Subs. by Ord. LV of 2000, s. 13.
Page 47 of 57
40. Power to make regulations.—(1) Subject to sub-section (2),
(i) the Board, 1[* * *] on the recommendation of the Commission and in
consultation with the Federal Government; and
(ii) the Commission 1[in consultation with] the Board, may make such
regulations as may be required to carry out the purposes of this Act 2[or
the functions of the Commission specified in sub-section (4) of section
20].
(2) The power to make regulations conferred by this section shall be subject to the condition
of previous publication and before making any regulations the draft thereof shall be published in two
newspapers of wide circulation for eliciting public opinion thereon within a period of not less than
1
[thirty] days from the date of publication.
2
[40A. Penalty for violation of rules 4[,] regulations 4[, directives and notification].—(1)
4
Any [person who contravenes or fails to comply with any provision of] rule made under section 39
or regulation made under section 40 4[or directive or notification issued under this Act] 4[shall be liable
to pay by way of penalty a sum] which may extend to ten million rupees and where the contravention
is a continuing, one with a further 4[penalty] which may extend to one hundred thousand rupees for
every day after the first during which such contravention continues.
(2) A 4[penalty] under sub-section (1) shall be imposed by the Commission after providing a
reasonable opportunity of being heard to the party;
3
[40AA. Fines and penalties to be credited to the Federal Consolidated Fund.― All fines
and penalties recovered by the Commission shall be credited to the Federal Consolidated Fund.]
2
[40B. Power of the Commission to issue directives, circulars, guidelines, etc. The
Commission shall have the power to issue such directives, codes, guidelines, circulars or notifications
as are necessary to carry out the purposes of this Act, the rules and regulations made thereunder and
4
[any administered legislation]].
PART XII
GENERAL
41. Common seal. The Commission shall have a common seal and such seal shall be kept in the
custody of the Chairman or such other person as may be authorized by the regulations made by the
Commission. Documents required or permitted to be executed under seal shall be specified in and
authenticated in such manner as shall be authorized by regulations made by the Board.
1
Omitted and subs., by Ord. LV of 2000, s.14.
2
Added & Ins. by Act IV of 2007, s. 17 (w.e.f. 1-7-07).
3
Ins by Act XVII of 2012, s. 13.
4
Subs. and ins. by Act XXXVI of 2016, ss. 24-25.
Page 48 of 57
1
[41A. Standard of proof.—(1) Where it is necessary for the Commission to establish or to
be satisfied, for the purposes of this Act or any administered legislation, that any person has
contravened:
(a) any provision of this Act or any administered legislation or subordinate
legislation;
(b) any notice, direction or requirement given or made under or pursuant to any
provision of this Act or any administered legislation;
(c) any of the terms and conditions of a registration granted under this Act or any
licence or registration granted under any administered legislation;
(d) any other condition imposed under or pursuant to any provision of this Act or
any administered legislation,
it shall be sufficient for the Commission to establish or to be satisfied as to the
matters referred above on the standard of proof applicable to civil proceedings
in summary manner in a court of law.
41B. Inquiry, investigation and other proceedings in respect of regulated persons.—(1)
Notwithstanding anything contained in any other law, including National Accountability Ordinance,
1999 (XVIII of 1999) and Federal Investigation Agency Act, 1974 (VIII of 1975) no action, inquiry,
investigation or proceedings in respect of any regulated activity, regulated securities activity,
transaction, process or permission granted under this Act or any administered legislation, shall be
taken, initiated or conducted by any Federal or Provincial investigating agency, bureau, authority or
institution by whatever name called without reference from the Commission.
No proceedings shall lie before any agency, bureau, authority or institution at the instance of
any party to a matter which is or has been in issue before the Commission, in respect of a matter which
is actually or has been or might or ought to have been a proper subject of complaint to the Commission
under the administered legislation:
Provided that cases pending before any court having jurisdiction before coming into force of
this Amendment Act, shall continue to be prosecuted and conducted without reference from the
Commission.]
42. Public servants.—(1) The Members, Commissioners, employees and other persons
authorized to perform or exercise any function or power under this Act or rendering services to
Commission as consultant or adviser shall be deemed to be public servants within the meaning of
section 21 of the Pakistan Penal Code, 1860 (Act XLV of 1860).
(2) Save as otherwise provided by this Act and only for the purposes so provided, nothing
therein contained shall be construed to mean that any person referred to in sub-section (1) is or shall
be deemed to be in the service of Pakistan or is to be regarded or treated as a civil servant.
1
Ins.by Act XXXVI of 2016, s. 26.
Page 49 of 57
1[42A. Indemnity of the Commission, Chairman, Commissioners, employees and
Member.—(1) No suit, prosecutions or any other legal proceedings or action in damages shall lie
against the Commission, Chairman, Commissioners, employees and Members for anything done or
omission in exercise or performance of any functions, power or duty conferred or imposed by or under
this Act or any administered legislation unless the act or omission is shown, beyond reasonable doubt
to have been in bad faith.
(2) A Chairman, Commissioner, employees, consultant, advisers and Member shall not be sued
in their personal capacity for the action bonafidely taken in their official capacity and in case of any
such suit the Commission shall bear expenses of the proceeding till its final dicision.]
1[42B. Recovery of penalties.—(1) Any penalty imposed by the Commission in the exercise
of its powers under this Act or any administered legislation or subordinate legislation, shall be payable
to the Commission and may be recovered by the Commission as a decree for the payment of money in
case where the person aggrieved by such order has,-
(a) preferred an appeal under section 34 and the Court has upheld the order of the
Commission or the Appellate Bench, it will automatically be converted into
execution proceeding and no fresh notices need to be issued to appellant; or
(b) not preferred an appeal to the Appellate Bench of the Commission under section
33 or to the Court under section 34 and the Court on application of the
Commission has confirmed and allowed conversion or initiation of execution
proceedings after notices to the parties as deem appropriate by the Court.
(2) The Court shall exercise all the powers of an executing court as provided in the Code of
Civil Procedure, 1908 (Act V of 1908), for the porposes of recovery of penalties:
Provided that the Court may, for reasons to be recorded, dispense with any procedure in the
Code of Civil Procedure, 1908 (Act V of 1908) and follow such procedure as it may deem fit in the
circumstances of the case for expeditious disposal.
(3) The executing Court may attach any immovable property or sale of any movable property,
including bank accounts of the person or company on whom a penalty has been imposed under this
Act or any administered legislation by the Commission and any transaction or attempt to alienate,
transfer, encumber or mortgage such property shall be void, illegal and without any lawfuI authority.
(4) All government departments, authorities, bodies, private entities, housing societies or
schemes, by whatever name called, banks and any other concerned entity shall, on the orders of the
Court, be bound to assist the Commission in providing details of moveable or immovable property of
judgment debtor.
(5) In addition to sub-sections (1), (2) and (3) any penalty imposed or amount ordered or
required to be surrendered or deposited with the Commission under this Act or an administered
legislation may also be recovered by the Commission as arrears of land revenue.
1
Subs. and Ins. by Act XXXVI of 2016, ss. 27-28.
Page 50 of 57
42C. Proof of documents by production of certified copies.—Notwithstanding anything
contained in the Code of Criminal Procedure, 1898 ( Act No. V of 1898), Qanun-e-Shahadat Order,
1984 (P.O. 10 of 1984) or any other law,—
(a) any duly certified copy of extract from any document or record maintained by
the Commission under this Act or any administered legislation shall be
construed as sufficient evidence in any inquiry or investigation or legal
proceedings before any tribunal, authority or court of law ;
(b) no one shall without the permission of the Commission in writing, take over or
remove any original document or register from the custody of the officer of the
Commission maintained under this Act or any administrated law.
42D. Cooperation and assistance to foreign regulatory authorities.—(1) Notwithstanding
anything contained in any other law for the time being inforce, the Commission may, on reciprocal
basis, cooperate with and provide assistance under this Act or any administered legislation to a foreign
regulatory authority or any other international organizations with whom the Commission has entered
into any arrangement or agreement or understanding for assisting in any inquiry or investigation. for
contravening the laws relating to financial services of the requesting authority.
(2) An assistance referred to in sub-secion (1) shall include the disclosure of any information
or document filed with or provided to the Commission under this Act or an administered legislation,
or any information or document obtained by the Commission from any person on the request of the
requesting authority.
(3) For the purposes of this section the Commission may, notwithstanding anything contained
in any other law for the time being inforce including Banking Companies Ordinance, 1962 (LXII of
1962), obtain any information or document from any person on the request of the requesting authority.
(4) Such cooperation and assistance may be provided without regard to the fact that such
contravention does not constitute offence under this Act or any administered legislation.
(5) The Commission may request the foreign regulatory body or authority or entity to seek such
mutual legal assistance for carrying out inspection, inquiry investigation under this Act or any
administered legislation.
(6) Notwithstanding anything contained in Qanun-e-Shahadat Order, 1984 (P.O. 10 of 1984)
all evidence, documents or any material transferred to Pakistan by foreign entity under this section
shall be considered as evidence in legal proceedings under this Act or any other law for the time being
in force.
(7) Any assistance provided under this section to any foreign regulatory authorities or
international organizations may be refused by the Commission on the grounds of national security and
public interest.
42E. Power to amend the Schedule.—The Federal Government may, by notification in the
official Gazette, amend the Schedule.]
Page 51 of 57
43. Dissolution of the Authority. The Authority is hereby 1dissolved and at all times
thereafter,—
(a) section 11 and sub-sections (3) to (7) (inclusive) of section 12 of the Ordinance
shall stand repealed and except as hereinafter provided, all references to the
Authority appearing in the Ordinance and any other law for the time being in
force shall be deemed to mean and refer to the Commission;
2
[(b) the rules under the Ordinance or under any other law for the time being in force
being administered by the Commission shall be made by the Commission with
the approval of the Federal Government.]
(c) save as otherwise provided in clause (b), all powers exercisable by the Federal
Government under any provisions of the Ordinance or any other law for the
time being in force, which immediately before the appointed day had been
delegated to the Authority, shall be exercised by the Commission;
(d) all assets, rights, powers, authorities and privileges and all property, movable
and immovable, cash and bank balance, reserve funds, investments and all other
interests and rights in, or arising out of, such property and all debts, liabilities
and obligations of whatever kind of the Authority subsisting immediately before
its dissolution shall stand transferred to and vest in the Commission;
(e) no officer, employee, servant, or any other person holding any post in
connection with the affairs of the Authority, shall have any right or lien to
appointment to any post in the Commission;
3
[(ea) the Commission may, on the instructions of the Federal Government, form a
committee to initiate disciplinary proceedings against a person referred to in
clause (e) and the Federal Government may take such disciplinary action as it
deem appropriate on the recommendation of the committee;]
(f) any person referred to in clause (e) who is appointed by the Commission shall
have the option either to remain a civil servant or to be an employee of the
Commission. The option once exercised shall be irrevocable;
(g) in the event of a person referred to in clause (e) opting to be an employee of the
Commission, he shall cease to be a civil servant for all purpose and shall be
entitled to such remuneration, allowances and other terms and conditions of
employment as are applicable to the employees of the Commission. For the
service rendered in the Authority such person shall be entitled to such benefits
including the transfer of benefits to the Commission as may be prescribed by
the rules. But, in the event of such a person opting to remain as a civil servant,
he shall be entitled to the same remuneration, allowances and other rights and
privileges as are admissible to civil servants but, in other respects such as
organizational structure, right to promotion and discipline, he shall be subject
to the regulations made by the Commission, and for the period he served the
Commission, the Commission shall contribute to the pension, gratuity and final
payment of provident fund in accordance with the rules.
1
i.e. 1-1-1999, see SRO 1404(I)/98-dt-31-12-98
2
Subs. by Ord. 55 of 2000, s.15.
3
Ins. by Act XXXVI of 2016, s. 29.
Page 52 of 57
(h) a person referred to in clause (e) who is not appointed by the Commission shall
continue to draw his pay, allowances, privileges or other benefits as he was
drawing while holding the post in the Authority and unless sooner he is
appointed by the Federal Government to another post or otherwise ceases to
remain in Government service on account of retirement, dismissal, removal,
discharge from service or in any other manner applicable to a civil servant, the
cost for payment salary, allowance and other benefits to such person shall be
borne by the Commission.
(i) save as otherwise provided in clauses (e) and (h), all debts and
obligations incurred or contracts entered into or rights acquired and all
matters and things engaged to be done by, with or for the Authority
before the appointed day shall be deemed to have been incurred, entered
into, acquired or engaged to be done by, with or for the Commission, as
the case may be; and
(j) all suits and other legal proceedings instituted by or against the
Authority before the appointed day shall be deemed to be suits and
proceedings by or against the Commission as the case may be and may
proceed and be dealt with accordingly.
1[43A. Abolition of Department of Insurance.—(1) As from the appointed date—
(a) the Department of Insurance shall stand abolished;
(b) no officer, employee, servant, or any other person holding any post in
connection with the affairs of the Department of Insurance, shall have any right
or lien to appointment to any post in the Commission;
(c) any person referred to in clause (b) who is appointed by the Commission shall
have the option either to remain a civil servant or to be an employee of the
Commission and the option once exercised shall be irrevocable;
(d) in the event of a person referred to in clause (b) opting to be an employee of
the Commission, he shall cease to be a civil servant for all purposes and shall
be entitled to such remuneration, allowances and other terms and conditions of
employment as are applicable to the employees of the Commission. For the
service rendered in the Department of Insurance such person shall be entitled to
such benefits including the transfer of benefits the Commission as may be
prescribed by the rules. But, in the event of such a person opting to remain as a
civil servant, he shall be entitled to the same remuneration, allowances and other
rights and privileges as are admissible to civil servants but, in other respects
such as organizational structure, right to seniority, promotion and discipline, he
shall be subject to the regulations made by the Commission, and for the period
he served the Commission, the Commission shall contribute to the pension,
gratuity and final payment of provident fund in accordance with the rules;
1
Ins. by Ord. LV of 2000, s. 16.
Page 53 of 57
(e) a person referred to in clause (b) who is not appointed by the Commission shall
continue to draw his pay, allowances privileges or other benefits as he was
drawing while holding the post in the Department of Insurance and unless
sooner he is appointed by the Federal Government to another post or otherwise
ceases to remain in Government service on account of retirement, dismissal,
removal, discharge from service or in any other manner applicable to a civil
servant, the cost for paying salary, allowances and other benefits to such person
shall be borne by the Commission;
(f) save as otherwise provided in this Act, all debts and obligations incurred or
contacts entered into or rights acquired and all matters and things engaged to be
done by, with or for the Federal Government under or pursuant to the Law of
Insurance before the appointed date shall be deemed to have been incurred,
entered into, acquired or engaged to be done by, with or for the Commission, as
the case may be; and
(g) all suits and other legal proceedings instituted by or against the Federal
Government under, or pursuant to, the Law of Insurance before the appointed
date shall be deemed to be suits and proceedings by, or against, the Commission
as the case may be and may be proceeded with and be dealt with accordingly.]
44. Savings. Save as otherwise provided in this Act, nothing in this Act shall affect or be
deemed to affect anything done, action taken, investigation or proceedings commenced, order, rule,
regulation, appointment, document, or agreement made, fee directed, resolution passed, direction
given, proceedings taken, or instrument executed or issued under or pursuant to any law amended or
repealed by this Act 1[or any amendments in this Act] and any such thing, action, investigation,
proceedings, order, rule, regulation, appointment, document, agreement, fee resolution, direction,
proceedings or instrument shall, if in force at the commencement date 1[or from the date of any
amendments made in this Act] and not inconsistent with any of the provisions of this Act, continue in
force and have effect as if it had been respectively done, taken, commenced, made, directed, passed,
given, executed or issued under this Act or the law as amended by this Act.
45. Act to override other laws. The provisions of this Act shall have effect notwithstanding
anything inconsistent therewith contained in any other law for the time being in force.
_______________
1
Ins. by Act XXXVI of 2016, s. 30.
Page 54 of 57
THE SCHEDULE
POWERS AND FUNCTIONS CONFERRED ON THE AUTHORITY UNDER THE
ORDINANCE TO BE EXERCISED BY THE COMMISSION
(See clause (o) of sub-section (4) of section 20)
1. To call for any information, document etc. for purposes of any proceeding or inquiry (section 12(4)
of the Ordinance).
2. To allow alteration in the Memorandum of Association (section 21 of the Ordinance).
3. To decide whether a name of a company is appropriate and permissible (section 37 of the
Ordinance).
4. To grant licence to an association not for profit to be registered as a company (section 42 of the
Ordinance).
5. To accord approval for conversion of a public company into a private company (section 44 of the
Ordinance).
6. Approval of prospectus (section 57 of the Ordinance).
7. To allow issue of securities outside Pakistan (section 62A of the Ordinance).
8. To specify minimum amount of shares to be applied for and the form of application for shares
(section 67 of the Ordinance).
9. To prescribe maximum rate of commission on issue of shares (section 82 of the Ordinance).
10. To sanction issue of shares at discount (section 84 of the Ordinance).
11. To grant extension in time for holding AGM in the case of listed companies (section 158 of the
Ordinance).
12. To allow a company to make a loan to a director (section 195 of the Ordinance).
13. To grant exemption for appointment of managing agent and to approve appointment of sole
sale/purchase/distribution agents (section 206 of the Ordinance).
14. To recover tenderable gains (section 224 of the Ordinance).
15. To prescribe cost accounting records for manufacturing companies (section 230 of the
Ordinance).
16. To extend period for laying annual accounts in the AGM by listed companies (section 233 of the
Ordinance).
17. To direct a change in financial year of holding companies and their subsidiaries (section 238 of the
Ordinance).
Page 55 of 57
18. To call for additional statements of accounts from companies (section 246 of the Ordinance).
19. To appoint auditors in certain cases (section 252(6) of the Ordinance).
20. To conduct investigation into the affairs of the companies (sections 263 and 265 of the
Ordinance.
21. To prosecute a company or person found guilty as a consequence of investigation (sections
270 and 271 of the Ordinance).
22. To appoint administrator (section 295 of the Ordinance).
23. To make application to the Court for winding up a company (section 309 of the Ordinance).
24. To recommend a panel of persons to the Court for appointment as official liquidator (section
321 of the Ordinance).
25. To order restoration of the names of defunct companies (section 439(9) of the Ordinance).
26. To exercise similar powers in the case of foreign companies (section 457 of the Ordinance).
27. To accord special permission to take over original documents from custody of Registrar
(section 467 of the Ordinance).
28. To prescribe additional fees for filing of documents (section 469 of the Ordinance).
29. To force companies to comply with the provisions of the Ordinance (section 472 of the
Ordinance).
30. To impose fine as penalty (section 476 of the Ordinance).
31. To hear appeals against the orders of Registrar (section 477 of the Ordinance).
32. To exercise powers of court in relation to enquires and proceedings (section 478 of the
Ordinance).
33. To direct appearance of officers of companies (section 479 of the Ordinance). .
34. To apply amount of fine towards payments of costs, compensations, etc. (section 483 of the
Ordinance).
35. To hear revision petition against the orders of Registrar, etc. (section.484 of the Ordinance).
36. To grant relief in certain cases (section 488 of the Ordinance).
37. To impose penalty for wrongful withholding of company profit (section 493 of the
Ordinance).
38. To impose penalty for non-compliance with directions (section 495 of the Ordinance).
Page 56 of 57
1[SCHEDULE I
[see Section 2(1)(aa) and (s)]
ADMINISTERED LEGISLATION
1. Motor Vehicle Act, 1939 (IV of 1939) [chapter VIII and section 125];
2. The Securities and Exchange Ordinance, 1969 (XVII of 1969);
3. The Companies (Appointment of Legal Advisers) Act, 1974 (X of 1974);
4. The Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 (XXXI of
1980);
5. The Companies Ordinance, 1984 (XLVII of 1984);
6. The Central Depositories Act, 1997 (XIX of 1997);
7. The Insurance Ordinance, 2000 (XXXIX of 2000); and
8. Stock Exchanges (Corporatization, Demutualization and Integration) Act, 2012 (XV of 2012);
9. Securities Act, 2015(III of 2015).]
1
Added by Act XXXVI of 2016, s. 31.
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Source: Pakistan Code, Ministry of Law and Justice (pakistancode.gov.pk). Text on this page is reproduced verbatim from the official PDF and is provided for reference only. For the authoritative version, always consult the source document or a current reported edition.
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