KARACHI: The Sindh High Court (SHC) on Thursday issued notices to the Pakistan Stock Exchange (PSX) and the Securities and Exchange Commission of Pakistan (SECP) on a petition regarding framing of regulations.

The two-judge bench headed by Justice Mohammad Shafi Siddiqui also ruled that a small portion of criteria for selection of securities eligible for trading in deliverable futures contract and cash settled futures contract markets would remain inoperative till the next hearing.

The Pakistan Stock Brokers Association through its lawyer moved the SHC against the PSX and SECP and contended that PSX was competent to frame regulations in terms of the Securities Act 2015, but there was a rider insofar as framing of regulations was concerned.

The counsel relied upon Section 7 (3) of the Act and argued that powers to make regulations could only be exercised subject to condition of its previous placement of the said regulations (proposed) on the website of SECP along with rationale for eliciting public opinion for a period not less than seven days from date of its placement.

The lawyer for petitioner further contended that the regulations which were placed on the website were not identical to those approved and thus the same did not fulfill the criteria as required under said section of Act.

He further objected to a portion [4(i)] of criteria for selection of securities eligible for trading, which said the securities of companies not complying with following conditions to be ineligible: “No investigation/inquiry has been concluded against the company with adverse findings of mismanagement or the company has not obtained stay order from court against any inquiry/investigation initiated by the commission”.

The counsel asserted that the portion in question did not appear on the website and it was contrary to the fundamental rights as the members of association were being deprived on account of contesting their right before the court.

After hearing the counsel for petitioner the bench said that points raised required consideration and issued notices to respondents for a date to be fixed after two weeks.

In the meantime only to the extent of later part of criteria 4(i) which reads “or company has not obtained stay order from court” shall remain inoperative, the bench in its order added.

Published in Dawn, July 16th, 2021