Securities and Exchange Commission of Pakistan Act, 1997

Exact source transcription retained, including print layout and extraction artifacts. Text SHA-256: 99841827985032435ba4a0f36f1f304ded27cc814bda8f6a456cc3c717ffcba6.

Page 1 of 57 
 
 
 
 
THE SECURITIES AND EXCHANGE COMMISSION OF 
PAKISTAN ACT, 1997 
 
 
 
 
CONTENTS 
PART I 
PRELIMINARY 
 
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 2 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 3 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. Self­regulatory organizations. 
36D. Registration of self­regulatory organizations. 
36E. Regulations of self­regulatory organization. 
36F. Maintenance and inspection of records. 
36G. Powers of the Commission to issue directions to self­regulatory 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 4 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 5 of 57 
 
THE SCHEDULE 
 
POWERS AND FUNCTIONS CONFERRED ON THE AUTHORITY UNDER THE ORDINANCE 
TO BE EXERCISED BY THE COMMISSION 
 
SCHEDULE I 
[see section 2(1) (aa) and (s)] 
ADMINISTERED LEGISLATION 
 
 
  
 
Page 6 of 57 
 
SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN ACT, 1997 
 
ACT No. XLII OF 1997 
          [19th December, 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 No. XXXVI of 2016, s. 2. 
 
Page 7 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; 
 
 
 
1Subs. and Ins. by Act No. XXXVI of 2016, s. 2. 
2Ins. by Ord. No. LV of 2000, s. 2. 
 
 
Page 8 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 Compa nies 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 ope rations, 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.] 
 
 
 
 
 
1Ins. omitted, subs. and added by Act No. XXXVI of 2016, s. 2. 
 
Page 9 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, mortgag e, 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 sub­section (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 se ven. 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 only by reason of the 
existence of a vacancy 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 f or 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, subj ect 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 No. XXXVI of 2016, s. 3. 
2Ins. Subs. and added by Ord. No. LV of 2000, s. 3. 
3Subs. by Act No. XVIII of 2013, s.2. 
 
 
Page 10 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 re­appointed 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 re­appointed 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 Commission ers, or six years, in case of Term B Commissioners, as 
provided for in sub­section (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 three­years 
unless, being eligible for re­appointment, he is re­appointed.] 
 
3[(3) Notwithstanding anything contained in sub­sections (1) and (2),­ 
 
(a)  a person who, on the date of his appointment is more than sixty­two years of 
age, shall not be appointed as a Commissioner; and 
 
(b)  a Commissioner shall cease to hold office attaining the age of sixty­five 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 remuneratio n 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 l iable 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 sub­section (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. 
 
1Ins. by Act No. XXXVI of 2016, s. 4. 
2Subs by Act No. XVIII of 2013, s. 3. 
3Ins. by Finance Act 2008 (Act No. I of 2008), s.15 
 
 
Page 11 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— 
 
(a)  3[five] shall be— 
 
3[(i)]  ex­officio the Secretary to the Government of Pakistan , Finance 
Division; 
 
(ii)  ex­officio the Secretary to the Government of Pakistan, Law Division; 
 
4[(iia)  ex­officio Secretary to the Government of P akistan, 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 
 
 
 
 
1Ins by Act No. XXXVI of 2016, ss. 5 and 6. 
2Subs. by Act No. XXXVI of 2016, s. 7. 
3Subs., omitted and re-numbered by Finance Act 2008 (Act No. I of 2008), s.15 
4Ins. by Ord. No. LV of 2000, s. 4. 
 
Page 12 of 57 
 
 (b)  1[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 four­year term but not more [.]1 
 
1[* * *] 
 
(4) An ex­officio 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 ex­officio 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 ex­officio 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 sub­section (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 comm ittees) 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. 
 
1Subs., ins. and omitted by Act No. XXXVI of 2016, s. 7. 
2Ins. by Ord. No. LV of 2000, s. 4 
3Subs by Finance Act 2008 (Act No. I of 2008), s.15 
4Subs. by Act. No. XXXVI of 2016, s. 8. 
 
Page 13 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 meetin gs of a 
committee shall be held at such times and places as the Chairman of the committee may determine. 
 
(4) The Members, other than ex­officio 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 sub­section (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 sub­sections (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 sub­s ection (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 14 of 57 
 
 (6) Each Commissioner shall give wri tten 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 wh ose 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 sub­section (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 sub­section (1) shall also declare his interest in accordance with 
the said sub­section 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 15 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 sub­section (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 sub­section (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 f rom 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 opportunit y 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 sub­divisions 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; 
 
1Ins. by Act No. XXXVI of 2016, s. 9. 
 
Page 16 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 regula ting 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 enfo rcing 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 subst antial acquisition of shares and the mer ger and take­over of 
companies; 
 
 1Ins. by Finance Act 2003 (Act No. I of 2003), s. 11. 
 2Ins., subs. and added by Act XXXVI of 2016, s. 9. 
 3Ins. and subs. by Finance Act 2008 (Act No. I of 2008), s.15 
 
Page 17 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 ref orms 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 su ch 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 genera lly 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; 
 
1Ins. by Finance Act 2007 (Act No. I of 2007), s. 17. 
2Ins. by Finance Act 2008 (Act No. I of 2008), s.15 
3Subs., omitted, and ins., by Act XXXVI of 2016, s. 9. 
4Ins by Finance Act 1999 (Act No. IV of 1999), s.17. 
5Omitted, subs. and added by Ord. No. LV of 2000, s.5 
 
Page 18 of 57 
 
(t)  regulating professional or ganizations connected with the i nsurance business;  
1[*] 
 
(u)  encouraging the organized development of the insurance market in Pakistan] 
1[;] 2[*] 
 
(v)  promoting and regulating development of Private Pension Schemes and Funds; 
3[*] 
 
3[(w)  to control and minimize misconduct, market abuse and financial crime in the 
financial services market and other sectors regulated by Commission;] 
 
3[(x)  for regulating and facilitating the growth of Shari ah 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 growt h 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 whethe r 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 sub­section (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. 
 
1Omitted, subs. and added by Finance Act 2003 (Act No. I of 2003), s. 11. 
2Omitted by Finance Act 2008 (Act No. I of 2008), s. 15. 
3Omitted, subs. and added by Act XXXVI of 2016, s. 9. 
 
 
Page 19 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 c ommercial 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 exer cise 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 awa reness 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. 
 
 
1Subs., ins. and added by Act No. XXXVI of 2016, s. 9. 
2Omitted and ins. by Ord. No. LV of 2000, ss. 5­6. 
 
Page 20 of 57 
 
1[(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 insurance industry]; 
 
(ii) regulation of companies and corporate sector and protection of the 
interests of investors; 
 
2[(iia) regulation of the insurance sector and protection of the interests of 
insurance policy holders;] 
 
(iii)  measures to encourage self­regulation by the Stock Exchanges 
2[insurers, insurance intermediaries, insurance surveyors] and NBFIs by 
specifying and the standards for such self­regulatory organizations; 
 
(iv)  measures to promote the development of and to r egulate the securities 
market; 2[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 mo dification) 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; 
 
1Added by Finance Act 1999 (Act No. IV of 1999), s.17. 
 2Added, ins. and subs. by Ord. No. LV of 2000, ss, 5­6. 
 
Page 21 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 a ny 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 sub­section (3), section 24A of the General 
Clauses Act, 1897 (X of 1897), shall apply to any order made or direction given under this Act. 
 
1Ins. by Ord. No. LV of 2000, ss, 5­6. 
 
Page 22 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;] 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; 
 
 
 1Subs. by Finance Act 1999 (Act No. IV of 19990, s.17. 
2Omitted, subs. added, and ins. by Act No. XXXVI of 2016, s. 10. 
 
Page 23 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 expenditur e 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 expen diture 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.] 
 
(4) The Commission shall act as t he 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. 
 
1Ins. by Act No. XXXVI of 2016, s. 11. 
2Ins. by Finance Act 2012 (Act No. XVII of 2012), s. 13. 
3Subs. and ins. by Ord. LV of 2000, ss. 9-10 
 
Page 24 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 sub­section (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 sub­section (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 c onditions 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 
sub­section (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 sub­section (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. 
 
 1Omitted and subs., by Ord. No. LV of 2000, Ss.11-12. 
 2Omitted by Finance Act 2003 (Act No. I of 2003), s. 11. 
3Subs. by Act No. XXXVI of 2016, s. 12. 
4Ins. by Act No. XXXVI of 2016, s. 13. 
 
Page 25 of 57 
 
(4) For the purpose of an inspection under this section, the regulated person or other person 
mentioned in sub­section (3) shall afford an authorized person access to the records or documents as 
may be required for the inspection and shall produce before the autho rized 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 sub­section (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 ac tivity 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 su spected 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); 
 
 
 
 1Subs. by Act No. XXXVI of 2016, s. 14. 
 
 
Page 26 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 
sub­section (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 sub­section 
(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 r ecklessly makes a 
false statement; or 
 
(e)  comply with clause (d) of sub­section (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. 
 
1Subs. by Act No. XXXVI of 2016, s. 15. 
 
 
 
Page 27 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 sub­section (3), any person who contravenes the requirements of clause (a), 
(b) and (c) of sub­section (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 p ass any order under Chapter XIA on a report of the 
investigation officer. 
 
(1C) Notwithstanding anything contained in Qanun­e­Shahadat 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 sub­section (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 sub­section (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. 
 
1Ins. by Act No. XXXVI of 2016, s. 15. 
 
Page 28 of 57 
 
 (5) Sub­section (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 sub­section (6) 
commence a hearing to determine the veracity o f 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 sub­sections (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 Gover nment through 
rules]. 
 
(2) Notwithstanding anything contained in sub­section (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 sub­section (2) was vexatious, excessive or with mala fide 
intent such officer shall be dismissed from servic e, 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 sub­section (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 sub­section (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. 
 
1[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 sect ion applies notwithstanding any  other 
enactment or law in Pakistan including Banking Companies Ordinance, 1962 (LXII of 1962). 
 
(3) Any person who refu ses to provide information required by the Commission under 
sub­section (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.] 
 
1Ins. and subs. by Act XXXVI of 2016, ss. 16 & 17. 
 
 
 
Page 29 of 57 
 
32. Power to call for examination.—(1) For the purpose of sub­section (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 sub­section (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, see king 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 wi thin 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.] 
 
1Ins. by Finance Act 2008 (Act No. I of 2008), s.15 
2Ins. by Act No. XXXVI of 2016, s. 18. 
 
Page 30 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 sub­section (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 sub­section (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 cle rical 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 Commis sioners or the 
Appellate Bench 3[or order made under sub­section (2) of section 32B]. 
 
(2) The appeal under sub­section (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 sub­section (1), accept, set aside or vary 
the order referred to in sub­section (1) or make such other order as the interest of justice require. 
 
(4) The Court shall at the stage of admission of a n 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. 
 
1Subs. by Finance Act 2007 (Act No. I of 2007), s. 17. 
2Omitted. by Finance Act 2008 (Act No. I of 2008), s.15 
3Ins. by Act No. XXXVI of 2016, ss. 19-20. 
 
Page 31 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 u se 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 sub­section (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 confid ence in or in connection with the performance of its 
functions or the exercise of its powers. 
 
(4) For the purpose of sub­section (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 sub­section (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 
 
 
Page 32 of 57 
 
 (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 info rmation 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 sub­section (6). 
 
(8) The disclosure of information to a body specified in sub­section (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 sub­section (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 sub­section. 
 
(10) The Chairman may impose condit ions to be complied with by the body and its officers, 
employees and agents in relation to the information disclosed to it under sub­section (8) and persons 
in respect of whom conditions are imposed shall be bound to comply with them. 
 
Page 33 of 57 
 
(11) If information i s disclosed to a body under sub­section (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 sub­sections (6), 
(7), (8), (10) or (11) to a Commissioner or an employee. 
 
(13) Nothing in any of sub­sections (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 sub­section (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 34 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 section 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 t o other business that is carried on in connection with 
or for the purposes of any such regulated activity. 
 
1Ins. by Act No. XXXVI of 2016, s. 21. 
 
 
 
 
 
 
Page 35 of 57 
 
PART IXB 
 
SELF REGULATORY ORGANIZATION 
 
36C. Self­regulatory 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  
self­regulatory 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, equipment’s, experienced 
man power and technical aspects, financ ial 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)  at­least one­half 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 specified. 
 
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 self­regulatory organizations.—(1) The application for registration as 
a self­regulatory organization shall be made in such form and manner and subject to such fee as may 
be specified. 
 
(2) Upon receipt of application under sub­section (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 36 of 57 
 
(b)  applicant has the ability to efficiently handle its functions as self­regulatory 
organization and its obligations under this Act and regulations made by the 
Commission; 
 
(c)  the regulations of the applicant contain satisfactory provisi ons 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 self­regulatory 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) Self­regulatory 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 self­regulatory 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 self­regulatory 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 37 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 non­compliance 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 t he 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 la w by 
its members; and 
 
(n)  perform such other duties and responsibilities as may be specified. 
 
36E. Regulations of self­regulatory organization .—(1) Self­regulatory  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 38 of 57 
 
(g)  right of appeal of member of self­regulatory organization against any 
disciplinary action by the self­regulatory organization including mann er 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 self­regulatory 
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 self­regulatory organization and the 
content of audit report; 
 
(n)  for confidentiality of information available with the self­regulatory 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 self­regulatory organization with or without 
modification or on its own motion, make or amend the regulations after givi ng due notice to the self­ 
regulatory organization. 
 
(3) The Commission may, by notice in writing served on a self­regulatory 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 self­regulatory organization has not complied 
with a requirement referred to in sub­section (3) within the period specif ied 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 self­regulatory organization and shall have effect 
accordingly. 
 
Page 39 of 57 
 
(5) Self­regulatory 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 self­regulatory organization as its members. 
 
36F. Maintenance and inspection of records.—(1) A self­regulatory 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 self­regulatory 
organization or its members and the self­regulatory 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 self­regulatory organization .—(1) 
Without prejudice to the powers conferred by section 40B the Commission may issue directions to 
self­regulatory 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 self­regulatory 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 executive officer, any director or officer of the self­regulatory 
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 self­regulatory organization. 
 
 
 
 
 
 
Page 40 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 accounta nts 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 ex­officio 
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 co­opted by the ex­officio 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 41 of 57 
 
36I. 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 chairma n, 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 non­renewable 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 42 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 sub­section (2) of section 
36T; 
 
(c)  to undertake comprehensive review and examination of the QAB work and 
independently assess the appropriateness of the quality co ntrol 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 adop ted 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 time 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 a s 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 sub­section (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 a ny deliberation or decision of AOB; 
and 
 
(b)  shall be disregarded for the purpose of constituting a quorum of AOB. 
 
Page 43 of 57 
 
(3) Any member of AOB who fails to disclose his interest as provided under sub­section (1) 
commits an offence and shall be liable to be remo ved 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 t hree 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 sub­section (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 est ablished, a fund to 
be managed and controlled by AOB in such form and manner as may be prescribed by regulations. 
 
(2) The fund under sub­section (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; 
 
 
Page 44 of 57 
 
(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 sub­section (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 45 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 r eferred 
to in clause (b) 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, gui delines 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 sub­section (2), if 
an audit firm fails to comply with the requirement of this Part or any regulations made there­under, 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 46 of 57 
 
 
(ii)  revoke registration and remove name from the register of audit or 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 sub­section (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 sub­section (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. 
 
 
1Subs. by Act No. XXXVI of 2016, s. 22. 
 
 
Page 47 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 sha ll 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 sub­section (1). 
 
(5) The court shall adopt procedure provided for under Chapter XXII­A 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 sub­section (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 Ben ch 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 along­with acknowledgement and copy 
of the petition or appeal.] 
 
_____________ 
 
PART XI 
 
RULES AND REGULATIONS 
 
39. Power to make rules .—(1) Subject to sub­section (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. 
 
1Ins. by Act No. XXXVI of 2016, s. 23. 
2Subs. by Ord. No. LV of 2000, s. 13. 
 
Page 48 of 57 
 
40. Power to make regulations.—(1) Subject to sub­section (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 sub­section (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 pub lished 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) 
Any 4[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 sub­section (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. 
 
 
 
 
1Omitted and subs. by Ord. No. LV of 2000, s.14. 
2Added & Ins. by Finance Act 2007 (Act No. IV of 2007), s. 17. 
3Ins by Finance Act 2012 (Act No. XVII of 2012), s. 13. 
4Subs. and ins. by Act No. XXXVI of 2016, ss. 24­25. 
 
 
Page 49 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 gran ted 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 s ervants 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 sub­section (1) is or shall 
be deemed to be in the service of Pakistan or is to be regarded or treated as a civil servant. 
 
 
 
 
 
1Ins.by Act No. XXXVI of 2016, s. 26. 
 
Page 50 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 decision.] 
 
1[42B. Recovery of penalties.—(1) Any penalty imposed by the Commissi on 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 purposes 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 shal l, 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 sub­sections (1), (2) and (3) any penalty imposed or amount ordered or 
required to be surrendere d or deposited with the Commission under this Act or an administered 
legislation may also be recovered by the Commission as arrears of land revenue.  
 
1Subs. and Ins. by Act No. XXXVI of 2016, ss. 27­28. 
 
 
 
 
Page 51 of 57 
 
42C. Proof of documents by production of certifie d copies .—Notwithstanding anything 
contained in the Code of Criminal Procedure, 1898 ( Act No. V of 1898), Qanun­e­Shahadat 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 as sistance 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-section (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 p erson on the re quest 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 Qanun­e­Shahadat 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 Sc hedule.—The Federal Government may, by notification in the 
official Gazette, amend the Schedule.] 
 
 
 
Page 52 of 57 
 
43. Dissolution of the Authority. The Authority is hereby 1dissolved and at all times 
thereafter,— 
(a)  section 11 and sub­sections (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 exe rcisable 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, r ights, 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 s uch 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 t he 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 o ther 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 
2Subs. by Ord. No. LV of 2000, s.15. 
3Ins. by Act No. XXXVI of 2016, s. 29. 
 
Page 53 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 Gover nment 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 a s 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, em ployee, 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 t he 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; 
 
 
 
 
 
1Ins. by Ord. No. LV of 2000, s. 16. 
 
 
Page 54 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, app ointment, 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 n otwithstanding 
anything inconsistent therewith contained in any other law for the time being in force. 
 
_______________ 
 
 
 
 
 
 
 
 
 
 
 
 
 
1Ins. by Act No. XXXVI of 2016, s. 30. 
 
Page 55 of 57 
 
THE SCHEDULE 
 
POWERS AND FUNCTIONS CONFERRED ON THE AUTHORITY UNDER THE 
ORDINANCE TO BE EXERCISED BY THE COMMISSION 
 
(See clause (o) of sub­section (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 g rant 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 56 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 non­compliance with directions (section 495 of the Ordinance). 
 
Page 57 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).] 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1Added by Act No. XXXVI of 2016, s. 31. 
 
 
        Dated: 24-06-2026