SECP slaps fine on brokerage house
SZ Securities sanctioned unauthorised movement of shares.
KARACHI:
The Securities and Exchange Commission of Pakistan (SECP) has penalised a brokerage house for unauthorised movement of an investor’s shares from his sub-account to the house account.
According to an order made available to the public on Saturday, the apex regulator of the brokerage industry fined SZ Securities Rs25,000 while disposing off the proceedings initiated through a notice sent on June 9.
An investor by the name of Faraz Shakoor complained to the SECP that he had received dividend on 500 shares he legally owned. Subsequently, his brokerage house, SZ Securities, imposed ‘unjustified charges’ of Rs8,000 on his account when he demanded that he be handed over the dividend.
The complainant further alleged that his sub-account balance as per the statement received from the Central Depository Company (CDC) was nil.
Later on, the SECP sought comments from the CCP and National Clearing Company of Pakistan (NCCPL) on the issue. In response, the CDC said its fee chargeable to the complainant’s sub-account since the date of its opening until April amounted to only Rs1,317. The NCCPL also confirmed that the complainant’s UIN annual maintenance fee was Rs150 per account only.
The CDC’s record showed the brokerage house was not holding the complainant’s shares in his sub-account on the date of the announcement of the dividend.
In its written response, SZ Securities maintained that after opening the trading account in 2006, the investor purchased 500 shares of Kot Adu Power Company, which were duly transferred to his sub-account. After the transaction, it said, the investor never communicated with the house in any manner.
Thereafter, the brokerage transferred shares from the investor’s sub-account to the house account ‘due to the non-payment of the service charges’ by the complainant since 2006.
According to the SECP order, the respondent failed to produce any valid written authority and lawful justification during the course of the hearing for transferring the complainant’s shares from his sub-account to the house account.
Similarly, with regard to the imposition of charges on the complainant, the SECP order said, the brokerage house failed to provide any schedule of charges applicable to investors on account of annual charges and CDC and NCCPL charges.
SZ Securities also failed to provide the SECP with the copy of any notice sent to the complainant for the payment of charges between 2006 and 2014, the order said.
Published in The Express Tribune, June 29th, 2014.
The Securities and Exchange Commission of Pakistan (SECP) has penalised a brokerage house for unauthorised movement of an investor’s shares from his sub-account to the house account.
According to an order made available to the public on Saturday, the apex regulator of the brokerage industry fined SZ Securities Rs25,000 while disposing off the proceedings initiated through a notice sent on June 9.
An investor by the name of Faraz Shakoor complained to the SECP that he had received dividend on 500 shares he legally owned. Subsequently, his brokerage house, SZ Securities, imposed ‘unjustified charges’ of Rs8,000 on his account when he demanded that he be handed over the dividend.
The complainant further alleged that his sub-account balance as per the statement received from the Central Depository Company (CDC) was nil.
Later on, the SECP sought comments from the CCP and National Clearing Company of Pakistan (NCCPL) on the issue. In response, the CDC said its fee chargeable to the complainant’s sub-account since the date of its opening until April amounted to only Rs1,317. The NCCPL also confirmed that the complainant’s UIN annual maintenance fee was Rs150 per account only.
The CDC’s record showed the brokerage house was not holding the complainant’s shares in his sub-account on the date of the announcement of the dividend.
In its written response, SZ Securities maintained that after opening the trading account in 2006, the investor purchased 500 shares of Kot Adu Power Company, which were duly transferred to his sub-account. After the transaction, it said, the investor never communicated with the house in any manner.
Thereafter, the brokerage transferred shares from the investor’s sub-account to the house account ‘due to the non-payment of the service charges’ by the complainant since 2006.
According to the SECP order, the respondent failed to produce any valid written authority and lawful justification during the course of the hearing for transferring the complainant’s shares from his sub-account to the house account.
Similarly, with regard to the imposition of charges on the complainant, the SECP order said, the brokerage house failed to provide any schedule of charges applicable to investors on account of annual charges and CDC and NCCPL charges.
SZ Securities also failed to provide the SECP with the copy of any notice sent to the complainant for the payment of charges between 2006 and 2014, the order said.
Published in The Express Tribune, June 29th, 2014.