Securities and Exchange Ordinance, 1969 (Repealed by Act XIV of 2016)

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[As Amended Up-to-Date Till 2012] 
SECURITIES AND EXCHANGE ORDINANCE, 1969 
ORDINANCE NO. XVII OF 1969 
(28th June, 1969) 
AN 
ORDINANCE 
  
To provide for the protection of investors, regulation of markets and dealings in 
securities 
  
        WHEREAS it is expedient to provide for th e protection of investors, regulation of 
markets and dealings in securities and for matters ancillary thereto; 
        AND WHEREAS the national interest of Pakistan in relation to the achievement of 
uniformity requires 1[Federal] legislation in the matter; 
        NOW, THEREFORE , in pursuance of  the Proclamation of the 25th day of March 
1969, read with the Provisional Constitution Order, and in exercise of all powers enabling 
him in that behalf,  the President is pleas ed to make and promulgate the following 
Ordinance:- 
  
CHAPTER - I 
PRELIMINARY 
  
1. Short title, extent and commencement.- (1) This Ordinance may be called the 
Securities and Exchange Ordinance,1969. 
(2)    It extends to the whole of Pakistan. 
(3)    It shall come into force on such date as the 
2[Federal] Government may, by 
                                                 
1 Substituted for “Central” through President’s Order No. 4 of 1975. 
2 Substituted for “Central” through President’s Order No. 4 of 1975. 
notification in the official Gazette, appoint. 
2. Definitions.- 3[(1)] In this Ordinance, unless there is anything repugnant in the 
subject or context,- 
4[ (a)   “agent” means a person appointed by a member to act on his behalf for the 
purposes recognized by 5[an] exchange;  
(ab)    “associate” means any partner, employee, officer or director of a member; 
(ac) “asset management company” means a company which offers investment schemes 
under trust deeds and issues redeemable securities”;   
(ad) “balloter” means a person who provides services to an issuer for selecting the 
required number of applicants of public issue through a computer draw;] 
 (b)    “bank”  means a banking comp any as defined in the Banking Companies 
Ordinance,1962 (LVII of 1962); 
(c)    “broker”  means any person engaged in  the business of effecting transactions in 
securities for the account of others; 
6[[(ca)] “central depository” means a company fo rmed to establish and operate a system 
for the central handling of securities, whether or not listed on an exchange, whereby such 
securities are deposited with and held in custody by, or regi stered in the name of, the 
company as a nominee for the depositors and d ealings in respect of such securities are 
effected by means of entrie s in securities accounts with out the physical delivery of 
scrips.”] 
                                                 
3 Section 2 renumbered as sub-section (1) through Se curities and Exchange (Amendment) Ordinance, 2000 
dated September 7, 2000. 
4 Clauses (a), (ab), (ac) and (ad) substituted for cl auses (aa) and (aaa) through Securities and Exchange 
(Amendment) Ordinance, 2000 dated September 7, 2000 . Earlier clauses (aa) and (aaa) were inserted 
through Securities and Exchange (Amendment) Ordinance, 1994 and Finance Act, 1995 respectively. 
The Clauses before substitution read as follows: 
(a) “associate” means any partner, employee, officer or director of a member, 
(aa) “asset management company” means a company which offers investment schemes under trust 
deeds and issues redeemable securities; 
(aaa) Authority means the Corporate Law Authority constituted under the Companies Ordinance, 1984 
(XLVII of 1984);  
 
5 Substituted for “a stock” through Finance Act, 2006 dated July 1, 2006.  
 
6 Clause (CC) inserted by Securities and Exchange (Amendment) Ordinance, 1994 and re-lettered as (ca) 
through Securities and Exchange (Amendment) Ordinance, 2000. 
  
 
7[(cb) “Commission” means the Securities and Exchange Commission of Pakistan 
established under the Securitie s and Exchange Commission of Pakistan Act, 1997 (XLII 
of 1997);] 
8[(cc) “Commodity Exchange” means a company that provides or, proposes to provide, 
the physical facilities necessary for trading in Commodity Futures Contracts;] 
9[(cd)   Commodity Futures Contracts” means an agreement to purchase or sell a 
particular commodity for delivery [or settlement] 10 in the future at a price that is 
determined at the initiation of the contract th at obligates each party to the contract to 
fulfill the contract at the specified price and that may be settled by delivery, cash or offset 
at an organized Exchange duly registered  with the Commission and in relation to 
Commodity Futures the expression “commodity” includes,- 
                     
(i) agricultural, livestock, fishery, forestry, mining or energy goods, and any product that 
is manufactured or processed from any such goods; and 
 
(ii) any other matter as may be notified by the Commission in the Official Gazette; 
 
 
(ce)      “corporatisation” means the c onversion of a Stock Exchange from a company 
limited by guarantee to a company limited by 
shares; 
 
 
(cf) “demutualisation” means the segregation of the ownership of a Stock Exchange from 
the right to trade on such Stock Exchange;] 
(d)    “equity security” means any stock or transferable share (preferred or common)  or 
similar security representing ownership; a ny security convertible , with or without 
consideration, into such a secu rity, or carrying any warrant or  right to subscribe to or 
purchase such a security; any such warrant or right itself; and such other security as may 
be prescribed; 
11[(da) “Exchange” means a Stock Exchange or a Commodity Exchange;] 
12[(dd) “free reserves” for the purpose of an  investment company, include any amount 
which, having been set aside out of the revenue or other surpluses is free in that it is not 
                                                 
7 Clause (cb) inserted through Securities and Exchange (Amendment) Ordinance, 2000 
8 Clause (cc) inserted through Finance Act, 2003. 
9 Clauses (cd) to (cf) inserted through Finance Act, 2006. 
10 The words “or settlement” inserted through Finance Act, 2008 dated June 27 2008. 
11 Clause (da) inserted through Finance Act, 2006. 
12 Clause (dd) inserted through Securities and Exchange (Amendment) Ordinance, 1980. 
 
retained to meet any diminuti on in value of the assets, spec ific liability, contingency or 
commitment of that company known to exist at the date of the balance sheet;] 
13[(de) “integration” means the merger of tw o or more Stock Exchanges in accordance 
with a scheme approved by the Commission;] 
(e)    “investment adviser” includes, pers on who is, for compensation, engaged in the 
business of advising others, e ither directly or through publica tions or writings, as to the 
value of securities or as to the advisabili ty of investing in, purchasing or selling 
securities, but does not include,- 
(i)     a  bank; 
(ii)    any lawyer, accountant, engineer or teacher whose performance of 
such services is solely incidental to the practice of his profession; 
(iii)   any broker, jobber, member or  associate whose performance of such 
services is solely incidental to  the conduct of his business as a 
broker, jobber, member or associ ate and who receives no separate 
compensation therefor; 
(iv)   the publisher of any newspape r, news magazine, or other publication 
of general and regular circulation; or 
(v)    the Investment Corporation of Pakistan; 
14[(f)  “Investment Company” means a company engaged principally or wholly in buying 
and selling securities of other companie s and includes a company, not being a holding 
company, the investment of which in the share capital of other companies at any one time 
is of an amount equivalent to eighty per cen t of the aggregate of its own paid up capital 
and free reserves, but does not include a bank or an insurance company or a corporation 
which is a member of a Stock Exchange;] 
(g)    “issuer” means any person who has issued or proposes to issue any security; 
(h) “jobber 15[or dealer]” means any person engage d in the business of  effecting 
transactions in securities for his own account, through a broker or otherwise, but does not 
                                                 
13 Clause (de) inserted through Finance Act, 2006. 
14 Clause (f) substituted through Securities and Exchange (Amendment) Ordinance, 1980. 
Before Substitution it read as follows: 
“(f) “Investment Company” means a company engaged principally or wholly in buying and selling 
securities of other companies and includes a company eighty percent of whose paid up capital is employed 
at any one time as investment in other companies; but does not include a bank or or an insurance company 
or a corporation which is member of a Stock Exchange. ” 
 
15 The words inserted through Securities and Exchange (Amendment) Ordinance, 2000. 
include any person who trades in securities for his own account, either  individually or in 
some fiduciary capacity, otherwise than as a part of a regular business;  
(i)     “member” means a member of 16[an] Exchange; 
17[   ] 
  
(j)     “person” includes a Hindu undivided family, a firm, an association or body of 
individuals, whether incorpor ated or not, a company and ev ery other artificial juridical 
person; 
(k)    “prescribed” means prescribed by rules made under this Ordinance; 
(l)     “security” includes- 
(i)     any stock, transferable sh are, scrip, [Modaraba Certificate] 18, note, 
debenture, debenture stock, [par ticipation term certificate,] 19 bond, 
investment contract [, forward or futures contract] 20, and pre-
organization certificate or subscription, and, in general,  any interest 
or instrument commonly known as a “security”  and, any certificate 
of deposit for, certificate of interest  or participation in, temporary or 
interim certificate for, receipt fo r , or any warrant or right to 
subscribe to or purchase, any of  the foregoing but does not include 
currency or any note, draft, bill of  exchange or banker’s acceptance 
or any note which has a maturity at  the time of issuance of not more 
than twelve months, exclusive of days of  grace, or any renewal 
thereof whose maturity is likewise limited; 
(ii)    any Government security as defined in the Securities Act, 1920 (X of 
1920); [  ]
21 
(iii)   any bonus entitlem ent voucher issued by the State Bank of Pakistan 
in accordance with any scheme announced by the [Commission] 22; 
                                                 
16 Substituted for “a stock” through Finance Act, 2006 
17 Clause (ii) omitted through Securities and Exchange (Amendment) Ordinance, 2000. Earlier it was 
inserted through Securities and Exchange (Amendment) Ordinance, 1980. 
Clause (ii) before omission read as follows:  
“(ii) “officer”, for the purposes of Chapters III, IV and V, in relation to an insurer, includes managing 
agents, manager, secretary, accountant or auditor of the insurer;” 
18Words and comma inserted through Securities and Exchange (Amendment) Ordinance, 1980. 
19 Words and comma inserted through Securities and Exchange (Amendment) Ordinance, 1980. 
 
20 Comma and words  inserted through Finance Act, 2003. 
21 Word “and” omitted through Finance Act, 2006. 
22 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
[and]23 
[(iv)  Commodity Futures Contract;]24 
(m)   “stock exchange” means any person w ho maintains or provides a market place or 
facilities for bringing together buyers and sellers of securities  or for otherwise 
performing with respect to securities the functions commonly performed by a Stock 
Exchange, as that term is generally unde rstood, and includes such market place and 
facilities [;]25 
[ (n)  “sub-underwriter” means a person who ha s made a contract w ith an underwriter to 
take up a part of the securities not fully subscribed by the public issue; 
(o)  “transfer agent” means a person appointed by the issuer to assist in the maintenance 
of record for issuance and transfer of secu rities and to perform functions of persons 
commonly known as Registrar; 
(p)  “underwriter” includes a person who has ma de a contract with an  issuer to subscribe 
and pay in cash  for those securities as are not fully subscribed by the public issue 
or a person who has initially bought the securities from an issuer for the purpose of 
selling such securities by means of a public offer; and  
 (q)  “venture capital company” includes a company which is engaged principally in 
financing through direct equity invest ment in another company and provides 
managerial expertise thereto;]26   
[Explanation :-In clause (1) “Modaraba Certificate” has the same meaning as in the 
Modaraba Companies and Modarabas (Flo atation and Control)  Ordinance, 1980 
(XXXI of 1980).]27 
[(2)   The words and expressions used but not  defined in this Ordinance shall have the 
same meaning as are assigned to them in  the Companies Ordinance, 1984 (XLVII of 
1984).]28 
 
                                                 
23 Word “and” inserted through Finance Act, 2006. 
24 Clause (iv) inserted through Finance Act, 2006. 
25 Semi-colon substituted for “Full stop” through Securities and Exchange (Amendment) Ordinance, 2000. 
 
26 Clauses n to q inserted through Securities and Exchange (Amendment) Ordinance, 2000. 
 
27 Explanation inserted through Securities and Exchange (Amendment) Ordinance, 1982. 
 
 
28 Sub-section (2) inserted through Securities and Exchange (Amendment) Ordinance, 2000. 
 
CHAPTER II 
REGISTRATION AND REGULATION OF STOCK EXCHANGES 
  
3.     No [  ]
29 Exchange to operate without registration. - [(1)] 30 No [ ] 31 Exchange 
shall operate or carry on its functions, and no person shall use or utilize, for the purpose 
of any transaction or dealing in any security, the facilities or services of [an]32 Exchange, 
unless such [ ]33 Exchange is registered under this Ordinance. 
 (2) The Authority shall determine the numbe r and places for the establishment of [ ] 34 
exchanges.   
4.     Eligibility for registration.-  (1) Any [ ] 35 Exchange which fulfill such conditions 
or  complies with such requirements as may be  prescribed to ensure fair dealings [, 
protection of investors and its sustainable economic viability] 36 shall be eligible for 
registration under this Ordinance.  
 (2)    The conditions or requirements whic h may be prescribed for the purposes of sub-
section (1)  may, among other matters, relate to- 
(a)    qualifications for membersh ip and admission, exclusion, suspension, 
expulsion and re-admission of members  therein to or therefrom; 
(b)    constitution and powers of the governing body and the powers and duties of 
the office bearers; 
(c)    representation [from a class or classes  of persons  or professions] 37 on  the 
governing body of [an]38 Exchange or any of its Committees;  
(d)    the manner in which business shoul d be transacted including restrictions on 
the business of the members; 
(e)    Memorandum and Articles of Associat ion, rules, regulations and by-laws of 
[an]39 Exchange;  and 
                                                 
29 The word “Stock” omitted through Finance Act, 2007. 
30 Section 3 re-numbered as sub-section (1) through Finance, Act, 1995. 
31 The word “Stock” omitted through Finance Act, 2007. 
32 Substituted for “a stock” through Finance Act, 2006. 
33 The word “Stock” omitted through Finance Act, 2007. 
34 The word “Stock” omitted through Finance Act, 2007. 
35 The word “Stock” omitted through Finance Act, 2007. 
36 Substituted for “and to protect investors” through Finance Act, 1995. 
37 Substituted for “of the Federal Government” through Finance Act, 1995. 
38 Substituted for “a stock” through Finance Act, 2006. 
 
(f)     the maintenance of accounts [and records] 40 including those of members, 
and their audit.  
5.     Registration.- (1)    Any [  ] 41 Exchange which is eligible for registration under 
section 4 may, in such form[, manner and on payment of such fee] 42 as may be 
prescribed, apply to the [Commission]43 for registration. 
 (2)    The [Commission] 44, if it is satisfied, after such inquiry and after obtaining such 
further information as it may consider necessary,- 
(i)     that the [  ]45 Exchange is eligible for registration; and 
(ii)    that it would be in the interest of  the trade and also in the public interest to 
register the [  ]46 Exchange;  
 may grant a certificate of registration to the [  ]47 Exchange. 
 (3)    No application for registration shall be refused except after giving the applicant an 
opportunity of being heard.  
[5A.          Brokers or agents not to  engage in business without registration.-   No 
person shall act as broker or agent to deal in the business of effecting transactions in 
securities unless he is registered with th e Commission in such manner, on payment of 
such fees and charges and on such conditions as may be prescribed.]48 
6.     Accounts, annual reports, returns, etc.-  (1)  Every [  ] 49 Exchange and every 
director, officer and member thereof shall prepare and maintain such books of accounts 
and other documents in such manner as ma y be prescribed; and every such book of 
accounts or document  shall  be subject to  inspection at all re asonable times by any 
person authorised by the [Commission]50 in this behalf. 
                                                                                                                                                 
39 Substituted for “a stock” through Finance Act, 2006. 
 
40 Inserted through Finance Act, 1995. 
41 The word “Stock” omitted through Finance Act, 2007. 
42 Substituted for “and manner” through Finance Act, 1995. 
43 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
44 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
45 The word “Stock” omitted through Finance Act, 2007. 
46 The word “Stock” omitted through Finance Act, 2007. 
47 The word “Stock” omitted through Finance Act, 2007. 
48Inserted through Securities and Exchange (Amendment) Ordinance, 2000. 
 
49 The word “Stock” omitted through Finance Act, 2007. 
50 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
 (2)    Every [  ] 51 Exchange shall submit to the [Commission] 52, in such manner and 
containing such particulars as may be prescr ibed, an annual report a nd periodical returns 
relating to its affairs. 
(3)    Without prejudice to th e provisions of sub- section (1) and sub-se ction (2), every [  
]53 Exchange and every director, officer or me mber thereof shall furnish such documents, 
information or explanation relating to the affairs of the [  ]54 Exchange or, as the case may 
be, relating to the business on the [  ] 55 Exchange of such director, officer or member as 
the [Commission]56 may, at any time, by order in writing require. 
7.     Cancellation of registration, etc.-  (1)  Where the [Commission] 57  is of opinion 
that[  ]58 Exchange or any member, director or officer of [an]59 Exchange has contravened 
any provision, or has otherwise neglected or failed to comply with any requirement, of 
this Ordinance, or of any rule, regulation or direction made or given thereunder, the 
[Commission]60 may, if it considers it necessary fo r the protection of investors or to 
ensure fair dealings or fair  administration of the [  ] 61Exchange so to do, by order in 
writing- 
(a)     suspend for such period as  may be specified in the order the 
transaction of any business on the[  ]62 Exchange; 
(b)     cancel the registration of the [  ]63 Exchange; 
(c)      supersede the governing body or other authority of the [  ] 64 
Exchange; 
(d)     [suspend or]65 remove the director, officer or member from his office 
in, or membership of, the [  ]66 Exchange; 
                                                 
51 The word “Stock” omitted through Finance Act, 2007. 
52 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
53 The word “Stock” omitted through Finance Act, 2007. 
54 The word “Stock” omitted through Finance Act, 2007. 
55 The word “Stock” omitted through Finance Act, 2007. 
56 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
57 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
58 The word “Stock” omitted through Finance Act, 2007. 
59 Substituted for “a stock” through Finance Act, 2006. 
60Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
  
61 The word “Stock” omitted through Finance Act, 2007. 
62 The word “Stock” omitted through Finance Act, 2007. 
63 The word “Stock” omitted through Finance Act, 2007. 
64 The word “Stock” omitted through Finance Act, 2007. 
65 The words inserted through Securities and Exchange (Amendment) Ordinance, 2000 
66 The word “Stock” omitted through Finance Act, 2007. 
        Provided that no such order shall be made except after giving the governing body or 
other authority or, as the case may be, the di rector, officer or member, an opportunity of 
being heard. 
 (2)    An order made under clause (c) or clau se (d) of sub-section (1) may also direct that 
the functions of the governing body or other author ity which has been superseded or of 
the director or officer who has been remove d shall be performed by such authority or 
person as may be specified therein. 
(3)    An order under sub-section (1) shall have effect notwithstanding anything contained 
in any other law for the time being in fo rce or in any Memora ndum or Articles of 
Association; 
        Provided that no order made under clau se (a) or clause (b) of sub-section (1) shall 
affect the validity of any contract lawfully entered into before the date of such order. 
8.     Restriction on dealings in securities.- (1)  No person shall tr ansact any business in 
securities on any Exchange [otherwise than as may be prescribed]67. 
(2)    No business shall be transacted on a Exchange in a security, other than a 
Government security [   ]68, which is not listed on such Exchange [:]69 
[Provided that business may be transacted in a delisted security for a period which 
may extend to six months in such manner as the Commission may direct.]70 
(3)    No person shall act as a dealer in a security listed on a Stock Exchange outside such 
Stock Exchange; 
[       ]71 
(4)    No person other than a member shall act as a broker or a jobber for any security not 
listed on a stock exchange: 
 Provided that the prohibition in this sub- section shall not appl y to discounting of 
any security evidencing a loan. 
 9.     Listing of Securities.- (1)  An issuer who intends to get any of his securities listed 
on a Stock Exchange shall submit an application therefore, in the prescribed form to the 
Stock Exchange and submit a copy of the application to the [Commission]72. 
                                                 
67 Substituted for “unless he is a member thereof” through Finance Act, 2006. 
68 Words “or a bonus entitlement voucher” omitted through Securities and Exchange (Amendment) 
Ordinance, 2000. 
69 Semicolon substituted for colon through Finance Act, 2003. 
70 Proviso inserted through Finance Act, 2003. 
71 Proviso omitted through Finance Act, 2006. Before omission it read as follows: 
“Provided that prohibition in this sub-section shall not apply to purchase, sale or transfer of any such 
security by or from investment corporation of Pakistan or the National Investment Trust.” 
(2)    Upon receipt of an application under s ub-section (1), the Stock Exchange may, if it 
is satisfied after making such inquiry as it may consider necessary that the applicant 
fulfils the conditions prescribed in this behalf , list the security for dealings on the Stock 
Exchange. 
(3)    Where a Stock Exchange refuse s to list a security, the [Commission] 73 may, either 
on petition by the applicant made within the pr escribed time or on its own motion, direct 
the Stock Exchange to list the security. 
(4)    Where after the listing of a security, the [Commission] or Stock Exchange finds that 
the application is deficient in any material re spect or that the issuer has failed to comply 
with any prescribed condition or requirement and that the continued listing of the security 
would not be in the public interest, the  [C ommission] or, as the case may be, the Stock 
Exchange may, by order, either require the issuer to correct the deficiency or comply with 
the prescribed condition or re quirement within the time speci fied in the order or revoke 
the listing. 
(5)    A listed security may be delisted on a pplication by the issuer to the Stock Exchange 
which may deny the application or grant it on  such conditions as appear necessary or 
appropriate for the protection of investors. 
(6)    Where a Stock Exchange refuses to delist a security, the [Commission] 74 may, on 
petition by the applicant made within the pres cribed time, direct the Stock Exchange to 
delist the security. 
[(7)   The Commission or a Stock Exchange may, if it considers it to be in the interest of 
trade or in the public interest so to do, by order recording the reasons, suspend for a 
period not exceeding sixty days the trading of any listed security and may, from time to 
time, for the said reasons and in the said manner extend the suspension for further periods 
not exceeding sixty days at any time.]
75 
[Omitted]76   
                                                                                                                                                 
72 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
73 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
74 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
75 Subsection (7) substituted  through Securities and Exchange (Amendment) Ordinance, 2000. Before 
omission it read as follows: 
“(7) The Federal Government or a Stock Exchange may, if  it considers it to be in the interest of trade or in 
the public interest so to do, suspend, by order recording the reasons, trading in any security.” 
76 Subsection (8) omitted through Securities and Ex change (Amendment) Ordinance, 2000. Before 
omission it read as follows: 
“(8) An order under subsection (7) shall remain in force for a period of [sixty days] which the Federal 
Government or, as the case may be, Stock exchange may extend for further periods not exceeding [sixty 
days] at any time.” 
 
Substituted for fourteen through Companies Ordinance, 1984 
(9)    No application submitted under sub-sec tion (1) shall be refused, and no listing shall 
be revoked under sub-section (4), unless the issuer has been given an opportunity of 
being heard. 
10.   Compulsory listing of securities.-  Where  the [Commission] 77, having regard to 
the nature of, and the dealings in, any security, is of the opinion that it is necessary or 
expedient in the public interest so to do, it may, after consulting a  Stock Exchange    and 
giving the issuer of such s ecurity an opportunity of bei ng heard, direct  the Stock 
Exchange   to list the security. 
CHAPTER III 
REGULATION OF ISSUER  
[11.   Submission of returns.
- Omitted 
12.   Submission of statement of beneficial owners of listed equity securities. Omitted 
13.   Prohibition of short-selling.- Omitted 
14.   Trading by directors, officers and principal shareholders.- Omitted 
15.   Regulation of proxies.- Omitted]78 
                                                 
77 Substituted for “Federal Government” through President’s Order No. 4 of 1975.  
78 Section 11 to 15 omitted through Companies Ordinance, 1984. Before omission these read as follows: 
“11. Submission of returns.- (1) An issuer of listed security shall furnish to the Stock Exchange, to the 
security holders and to the Federal Government an annual report of its affairs and such statements and other 
reports as may be prescribed. 
(2) Without prejudice to the provisions of sub-section (1) an issuer of a listed security shall furnish to 
the Federal Government [, the Stock Exchange and the shareholders] such other documents, information or 
explanation relating to its affairs as the Federal Government may, at any time, by order in writing require. 
 
12. Submission of statement of beneficial owners of listed equity securities.- Every director or officer of an 
issuer who is or has been the beneficial owner of an y class or its listed equity  securities and every person 
who is directly or indirectly the beneficial owner of more than ten percent of any class of such securities 
shall submit to the Federal Government such returns pertaining to the beneficial ownership of such 
securities in such form and at such times or at such intervals as may be prescribed. 
 
13. Prohibition of short-selling.- No director or officer of  an issuer of a listed equity security and no person 
who is directly or indirectly the beneficial owner of not less than ten percent of such securities shall 
practice directly or indirectly short-selling such securities. 
 
14. Trading by directors, officers and principal sharehol ders.- (1) Where any director or officer of a listed 
equity security or any person who is directly or indirectly beneficial owner of not less than ten percent of 
such securities make any gain by the purchase and sa le, or the sale and purchase, of any such security 
within a period of less than six months, such director, officer or beneficial owner shall make a report and 
tender the amount of such gain to the issuer: 
Provided that nothing in this sub-section shall apply to a security acquired in good faith in 
satisfaction of a debt previously contracted. 
[CHAPTER III-A]79 
  
INSIDER TRADING 
  
[15A. Prohibition of insider trading.— (1) No person shall indulge in insider trading. 
(2) Insider trading shall include, – 
(a) an insider person transacting any deal , directly or indire ctly, using inside 
information involving listed securities to which  the inside information 
pertains, or using others to transact such deals; 
(b) any other person to whom inside in formation has been passed or disclosed 
by an insider person transacting any d eal, directly or indirectly, using 
inside information involving listed securities to which the inside 
information pertains, or using others to transact such deals; 
(c) transaction by any person as specified in clauses (a) and (b), or any other 
person who knows, or ought to have known under normal and reasonable 
circumstances, that the information possessed and used for transacting any 
deal is inside information; 
(d) an insider person suggesting or r ecommending to another person to engage 
in dealing in any listed securities to which the inside information 
possessed by the insider person pertai ns, without the inside information 
being disclosed to the person who has dealt in such securities: 
(3) Nothing in this section shall apply to— 
(a) any transaction performed under an agreement that was concluded before 
the time of gaining access to inside information; or 
                                                                                                                                                
 
(2) Where a director, officer or beneficial owner fails or neglects to tender or the issuer fails to 
recover, any such gain as is mentioned in sub-section (1) within a period of six months after its accrual, or 
within sixty days of a demand therefor, whichever is later, such gain shall vest in the Federal Government 
which may recover the same as arrears of land revenue. 
 
15. Regulation of proxies.- Notwithstanding anything contained in the Companies Act, 1913 or 
Memorandum and Articles of Association of the issuer  of a listed security, the Federal Government may 
regulate the solicitation of any proxy, consent or author isation pertaining to the securities of such issuer in 
such manner as may be prescribed. ” 
79 Chapter III-A inserted through Finance Act, 1995. 
(b) the disclosure of inside informati on by an insider person as required under 
law. 
(4) No contract shall be void or unenforceab le by reason only of an offence under this 
section. 
15B. Inside information.— (1) The expression “inside information” means, – 
(a) information which has not been made public relati ng, directly or 
indirectly, to listed securities or one or more issuers and which, if it were 
made public, would be likely to have an effect on the prices of those listed 
securities or on the price of related securities; 
 (b) in relation to derivatives on comm odities or information which has not 
been made public, relating, directly or  indirectly, to one or more such 
derivatives and which are traded in accordance with accepted market 
practices on those markets; or 
(c) in relation to persons responsible for the execution of orders concerning 
listed securities, information which is conveyed by a client to such person 
and related to the client’s pending orders. 
15C. Insiders.—(1) Insiders shall include, – 
(a) sponsors, executive officers and directors of an issuer; 
(b) sponsors, executive officers, director s and partners of a legal person or 
unincorporated business association, in  which the issuer holds shares or 
voting rights, directly or indirectly, of twenty per cent or more; 
(c) sponsors, executive officers, director s and partners of a legal person or 
unincorporated business association w ho holds, directly or indirectly, 
shares or voting rights of ten per cent or more in an issuer; 
(d) sponsors, executive office rs and directors of an organization, that has been 
engaged in the placement of listed securities or the public offer of 
securities or the issuing and marke ting of such securities, who has had 
access to insider information during  his employment till a period of one 
year after leaving employment; 
(e) any natural person holding, di rectly or indirectly, ten per cent or more 
shares of an issuer; 
(f) sponsors, executive officers and dir ectors of credit inst itutions in which 
the issuer has an account; 
(g) any person obtaining inside inform ation as part of his employment or 
when discharging his usual duties in an  official capacity, or in any other 
way relating to  work performed under contract of employment or 
otherwise; 
(h) any person obtaining inside information through unlawful means; and 
(i) a spouse, lineal ascendant or desc endant, partner or nominee of a person 
referred to in clauses (a) to (h). 
15D. Listed companies respons ibilities to disclose  inside information.— (1) Listed 
companies shall inform the public, in the manner specified by th e Commission, as soon 
as possible of inside information which directly concerns the listed securities. 
(2) Listed companies may delay the public disclosure of inside information, as referred to 
in sub-section (1) in order not to prejudice their legitimate interests, provided that such 
delay does not mislead the public and provided that the company is able to ensure the 
confidentiality of the information and the company shall inform the Commission of the 
decision to delay the public disclosure of inside information forthwith. 
(3) Whenever a listed company or a person acting on its behalf, discloses any inside 
information to any third party in the normal exercise of employment, profession or duties, 
complete and effective public  disclosure of that in formation must be made 
simultaneously in the manner specified by the Commission: 
Provided that the provisions shall not  apply if the person receiving the 
information owes a duty of confidentiality, regardless of whether such duty is based on a 
law, regulations, articles of association or contract. 
(4) Listed companies or persons acting on its behalf, shall maintain and regularly update 
a list of persons employed, under contract or  otherwise in the manner specified by the 
Commission who have access to inside info rmation and provide such list to the 
Commission whenever the Commission requests it.
  
(5) Persons discharging managerial responsib ilities within a listed company and, where 
applicable, persons closely associated wi th them, shall notify the Commission of 
transactions conducted on their own account re lating to the securities of such listed 
company in the manner specified by the Commission. 
(6) The Exchanges shall adopt structur al provisions, operating procedures and 
surveillance techniques to detect and prevent insider trading and market abuse practices, 
within such time as may be specified by the Commission and according to the regulations 
made hereunder. 
15E. Liability for contravention.— (1) Any person who contravenes the provisions of sub-
section (1) of section 15A shall, on be ing found guilty of contravention by the 
Commission, be liable to fine, which may exte nd to ten million rupees  or three times the 
amount of gain made or loss avoided by su ch person, or loss suffe red by another person, 
whichever amount is higher. 
(2) In addition to the fine imposed under sub-section (1), such person,– 
(a) may be directed by the Commission, – 
(i) to surrender to the Commission, an amount equivalent to the gain 
made or loss avoided by him; or 
(ii) to pay any other person w ho has suffered a loss, an amount 
equivalent to the loss so suffered by such person; and 
(b) may, where such person is an executiv e officer, director, auditor, advisor, 
consultant of a listed company, be removed from such office by an order 
of the Commission and debarred from auditing any listed company for a 
period of upto three years; or 
(c) may, where such person is registered as a broker or agent, be liable to 
cancellation of registration.
  
(3) Where an insider person discloses inside information to any other person who is not 
required to possess such information for any reason, the insider person shall be liable to 
fine, to be imposed by the Commission, which may extend to thirty million rupees. 
(4) The Commission may, by notification in the official Gazette, make regulations to 
regulate persons who produce or disseminate research concerning listed securities or 
issuers of listed securities and persons w ho produce or disseminate other information 
recommending or suggesting investment strate gy, intended for dist ribution channels or 
for the general public.]80 
                                                 
80 Section 15-A and 15 B substituted by 15 A to 15 E through Finance Act, 2008 dated June 27 2008.  
The substituted section 15-A and 15B read as under: 
15-A.  Prohibition on stock exchange deals by insiders. -  No person who is, or has been, at any time 
during the preceding six months, associated with a comp any shall, directly or indirectly, deal on a stock 
exchange in any listed securities of that or any other company or cause any other person to deal in 
securities of such company, if he has information which-  
a)     is not generally available; 
b)     would, if it were so available, be likely to materially affect the price of those securities; or 
c)    relates to any transaction (actual or contemplated) involving such company. 
        Explanation.
-  For the purpose of this section, the expr ession “associated with” shall mean a person 
associated with a company, if he-  
(i)     is an officer or employee of that company or an associated company; or 
(ii)    occupies a position which gives him access th ereto by reason of any professional or business 
relationship between him or his employer or a company or associated company of which he is a director. 
CHAPTER  IV 
PROHIBITIONS AND RESTRICTIONS  
16.   Credit, [pledging] 81 and lending of customers’ securities.-  No member or 
associate shall, in contravention of any ru les made under this Ordinance, directly or 
indirectly,- 
(a)    extend or maintain credit, or a rrange for the extension or maintenance of 
credit, to or for any person for the purpose of  purchasing or carrying any 
security; or  
(b)    borrow on any security or lend or arrange for the lending of any security 
carried for the account of a customer ; or 
[(c)    pledge or arrange for the pledging of any security carried  for the account of 
any customer.]82  
17.   Prohibition of fraudulent acts, etc ._ No person shall, for the purpose of inducing, 
dissuading, effecting, preventing or in a ny manner influencing or turning to his 
advantage, the sale or purchase of any security, directly or indirectly,- 
(a)    employ any device, scheme or artifice, or engage in any act, practice or course 
of business, which operates or is intended or calculated to operate as a fraud 
or deceit upon any person; or  
                                                                                                                                                 
15 B.   Liability for contravention of section 15A.-    (1) Where a person contravenes the provisions of 
section 15A, the Authority may, by a notice in writing,  ask such person to show cause for compensating 
any person who has suffered loss for such contravention and initiating prosecution against him. 
(2)    Where a person to whom a notice has been issued under sub-section (1) satisfy the Authority that - 
(a)    any dealing on stock exchange or communication of any information was  not  made with the intent of 
making any profit or causing a loss to any person or company; or 
(b)    the dealing on stock exchange or any information was communicated in good faith in discharge of his 
legal responsibilities. 
the Authority may withdraw such notice. 
 (3)    Where the Authority is not satisfied with the explanation of the person given in response to the show 
cause notice served upon him under sub-section (1), it may direct him to pay any other person who has 
suffered loss for any contravention of section 15A, compensation which shall not be less than the amount 
of loss sustained by any other person as a result of such dealing or communication of information: 
                Provided that where the person who has suffered any loss for any contravention of section 15A is 
not determined, the amount of compensation equivalent to the gain accrued or the loss avoided by such 
contravention, shall be payable to the [Commission]. 
 (4)    In addition to compensation payable under sub-section (3), a person contravening the provisions of 
section 15A shall be punishable with imprisonment for a term which may extend to three years, or with fine 
which may extend to three times the amount of gain accrued or loss avoided by such contravention, or with 
both. 
 (5)    Any compensation payable under this section shall be recoverable as arrear of land revenue. 
81 Substituted for “hypothecation” through Securities and Exchange (Amendment) Ordinance, 1980. 
 
82 Clause (c) substituted through Securities and Exchange (Amendment) Ordinance, 1980. 
(b)    make any suggestion or statement as a fact  of that  which he does not believe 
to be true;  or 
(c)    omit to state or actively conceal [a material fact]83  having knowledge or belief 
of such fact;  or  
(d)    induce any person by deceiving him to do or omit to do any thing which he 
would not do or omit if he were not so deceived; or  
(e)    do any act or practice or engage in a course of business, or omit to do any act 
which operates or would operate as a fraud, deceit or manipulation upon any 
person, in particular-      
(i)     make any fictitious quotation;  
(ii)    create a false and misleading appearance of active  trading in any 
security;  
(iii)   effect any transaction in su ch security which involves no change 
in its beneficial ownership; 
(iv)   enter into an order or orders  for the purchase and sale of security 
which will ultimately cancel out each other and will not result in 
any change in the beneficial ownership of such security; 
(v)    directly or indirectly effect a series of transactions in any security 
creating the appearance of active trad ing therein or of raising of  
price for the purpose of inducin g its purchase by others or 
depressing its price for the purpose of inducing its sale by others; 
(vi)   being a director or an offi cer of the issuer of a listed equity 
security or a beneficial owner of  not less than ten per cent of 
such security who is in possessi on of material facts omit to 
disclose any such facts while buying or selling such security. 
18.   Prohibition of false statements, etc. -  No person shall, in any document, paper, 
accounts, information or explanation which he is, by or under this Ordinance, required to 
furnish , or in any application made under th is Ordinance, make any statement or give 
any information which he knows or has reason able cause to believe to be false or 
incorrect in any material particular. 
                                                 
 
83 Substituted for “a fact” through Securities and Exchange (Amendment) Ordinance, 1980. 
[18A.  Prohibition of making fictitious and mu ltiple applications for new issues .- 
 (1)  No person or any other person on his be half shall make a fic titious application or 
submit more than one application for share of companies offered to the public. 
(2)    In case of contravention of the provisi ons of sub-section (1), the application money 
shall be liable to confiscation: 
      Provided that no action under this s ub-section shall be taken without giving the 
applicant an opportunity of being heard.]84 
         
19.   Maintenance of secrecy.-  No person shall, except with the permission of the 
[Commission]85 , communicate or otherwise disclose  to any person not legally entitled 
thereto any information which has been entrus ted to him or which he has obtained or to 
which he had access in the course of th e performance of any functions under this 
Ordinance. 
20.   Prohibitory orders.- (1) Where the [Commission]86 is of opinion that any person is 
engaged or is about to be engaged in any act or practice which constitutes or is calculated 
to constitute a contravention of the provisions of this Ordinance or of any rules made 
thereunder, or that any person has neglected, or  is not likely, to do an act the omission or 
failure to do which constitutes such contravention, it may, by order in writing, direct such 
person to abstain from doing the act or committing the practice which constitutes or is 
calculated to constitute such c ontravention, or to do the act, the omission or failure to do 
which constitutes such contravention. 
 (2) Every person to whom a direction unde r sub-section (1) is given shall comply 
therewith in such manner, if any, and within such time, as may be specified therein. 
  
CHAPTER V 
ENQUIRIES, PENALTIES, ORDERS AND APPEALS 
21.   [(1)   The [Commission]
87 may, on its own motion or on  representation of not less 
than [one-tenth]88 in number of the members of the [  ] 89  Exchange or, in the case of the 
business or any transaction mentioned in clau se (b), on the representation of the [  ] 90 
                                                 
84 Section 18A inserted through Finance Act, 1995. 
85 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
86 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
87 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
88 Substituted for “one fifth” through Securities and Exchange (Amendment) Ordinance, 2000. 
89 The word “Stock” omitted through Finance Act, 2007. 
90 The word “Stock” omitted through Finance Act, 2007. 
Exchange or any person intere sted in or affected by such business or transaction, at any 
time by order in writing, cause an enquiry to be made by a ny person appoint ed in this 
behalf into- 
(a)    the affairs of,  or dealings in, any[  ]91  Exchange; or 
(b)   the dealings, business or any tran saction in securities by any [person or] 92 
broker, member, director or officer of [an]93 Exchange.  
(2)   Where any enquiry under sub-section (1) has been under taken every past or present 
member, director, manager or other officer of the[  ] 94  Exchange [or any other person] 95 
to which the enquiry relates, and every ot her person who has had any dealing in the 
course of his business with such [person or] 96 [  ] 97 E x c h a n g e    o r  w i t h  t h e  d i r e c t o r ,  
manager or officer thereof, shall furnish su ch information and docum ents in his custody 
or power or within his knowledge relating to  or having bearing on the subject-matter or 
the enquiry as the person conducting the enquiry may require.]98 
 (3)    The person conducting an enquiry under sub-section (1) may, for the purpose of 
such enquiry, enter into any premises belong ing to or in the occupation of the[  ] 99  
Exchange or the issuer or of  the person to whom the enqui ry relates, a nd call for and 
                                                 
91 The word “Stock” omitted through Finance Act, 2007. 
92 The words “person or” inserted through Finance Act, 2008 dated June 27, 2008. 
93 Substituted for “a Stock” though Finance Act, 2006. 
94 The word “Stock” omitted through Finance Act, 2007. 
95 The words “or any other person” inserted through Finance Act, 2008 dated June 27, 2008. 
 
96 The words “person or” inserted through Finance Act, 2008 dated June 27, 2008. 
 
97 The word “Stock” omitted through Finance Act, 2007. 
98 Sub-sections (1) and (2) substituted through Companies Ordinance, 1984. Before substitution these read 
as follows: 
(1) The Federal Government may, on its own motion or, in the case of issuer of  listed securities, on 
representation of holders of not less than ten percen t of equity securities at any time by order in 
writing, cause an enquiry to be made by any person appointed in this behalf into- 
 
(a) The affairs of any Stock Exchange, or any issuer of a listed security; or 
(b) The business or any transaction in  any security by any member di rector or officer of a Stock 
Exchange or of an issuer, or of a director or an officer of whereof, or by any person who is 
directly or indirectly the beneficial owner of not less than ten percent of a listed security. 
   
(2) Where an enquiry under sub-section (1) has been undertaken, every member, director, [auditor], 
manager, or other officer of the Stock Exchange r the issuer to which, or to whose member, 
director, officer the enquiry relates and every other person who has had any dealing in the course 
of his business with such Stock Exchange, or issuer or with the director, [auditor], manager, or 
other officer thereof, shall furnish such information in his custody or power or within his 
knowledge relating to or having a bearing on th e subject matter of the enquiry as the person 
conducting the enquiry may require.  
99 The word “Stock” omitted through Finance Act, 2007. 
inspect and seize books of accounts or documents in the possession of any such[  ] 100  
Exchange, issuer or person. 
(4)    The person holding an enquiry under su b-section (1) shall, for the purpose of such 
enquiry have the same powers as are vested in a court under the Code of Civil Procedure, 
1908 (Act V of 1908), when trying a suit, in respect of the following matters, namely :- 
(a)    enforcing the attendance of a person and examining him on oath or 
affirmation;  
   (b)    compelling the production of documents; 
  (c)    issuing commissions for the examination of witnesses; 
and any proceedings before such person shal l be deemed to be “judicial proceeding” 
within the meaning of sections 193 and 228 of the Pakistan Penal Code (Act XLV 
of 1860). 
22.   Penalty for certain refusal or failure. -(1) If any person- 
(a)    refuses or fails to furnish any document, paper or information which he is 
required to furnish by or under this Ordinance;  or 
(b)    refuses or fails to comply with  any order or direction of the [Commission]
101 
made or issued under this Ordinance; or 
(c)    contravenes or otherwise fails to co mply with the provisions of this Ordinance 
[or any rules or regulations made thereunder]102; 
the [Commission]103 may, if it is satisfied after giving the person an opportunity of being 
heard that the refusal, failure  or contravention was willful,  by order direct  that such 
person shall pay to the [Commission] 104 by way of penalty such  sum not exceeding [fifty 
million]105 rupees as may be specified in the order and, in the case of a continuing 
default, a further sum calculated at the rate of [two hundred]106 thousand rupees for every 
day after the issue of such order during which the refusal,  failure or contravention 
continues. 
                                                 
100 The word “Stock” omitted through Finance Act, 2007. 
101 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
102 Words inserted through Finance, Act, 2006. 
103 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
104 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
105 Substituted for “one hundred thousand” through Finance Act, 2007. Earlier it was substituted for “thirty 
through Securities and Exchange (Amendment) Ordinance, 2000.” 
106 Substituted for “two thousand through Finance Act, 2007. Earlier “two” was substituted for “one” 
through Securities and Exchange (Amendment) Ordinance, 2000. 
 (2)    Any sum directed to be  paid under sub-section (1) shall be recoverable as an arrear 
of land revenue. 
(3)    No prosecution for an offence against this Ordinance shall be instituted in respect of 
the same facts on which a penalty has been imposed under this section. 
23.   Civil liabilities.- (1) Every contract made in cont ravention of any provision of this 
Ordinance or any rule made thereunder shall be voidable as regards the rights of any 
party to the contract contrave ning such provision or any pe rson not being a party to the 
contract who acquires any righ t under the contract  with actual knowle dge of the facts by 
reason of which its making or performance wa s in such contravention and any person 
affected by such contract not being himsel f a party to the contravention may sue to 
rescind any such contract to the extent it  has been consummated or for damages when 
recision is not possible.  
(2)    Any person who makes or causes to be made, in any application, report, or 
document filed with the [Commission] 107 or [an]108 Exchange pursuant to this Ordinance 
or any rule made thereunder, any statement which was false or misleading with respect  
to any material fact, at the time and in the light of the circumstances under which it was 
made, shall be liable to any person who has purchased or sold  a security in reliance on 
such statement for damages caused by such reli ance, without regard to the presence or 
absence of any contractual relationship betw een the two, unless the person who made or 
caused to be made the application, report or  document proves that he acted in good faith 
and had no knowledge or reasona ble ground to believe that the statement was false or 
misleading. 
 (3)    Any person who participates in any act or transaction in contravention of section 17 
shall be liable to any person w ho has purchased or sold a secu rity in reliance on such act 
or transaction for damages caused by such re liance, without regard to the presence or 
absence of any contractual relationship between the two, unless the person so 
contravening proves that he  acted in good faith and had no knowledge or reasonable 
ground to believe that there was any fraud, untruth or omission. 
(4)    Every person who directly or indirect ly exercises control over the affairs of any 
person liable under this section shall also be liable to the same extent as the person whose 
affairs are so controlled, unle ss he proves that he acted in good faith and did not directly 
or indirectly induce the act or acts giving rise to the cause of action. 
 (5)    Liability under this section shall be joint and several,  and every person who 
becomes liable may recover contribution as in cases of contract from any person who, if 
joined in the original suit, would have been liable to make the same payment, unless the 
plantiff was, and the defendant was not, guilty of fraudulent misrepresentation. 
                                                 
107 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
108 Substituted for “a stock” through Finance Act, 2006. 
(6)    No suit for the enforcement of any ri ght or remedy provided for in this section shall 
lie after the expiry of three years from the date of the accrual of the cause of action. 
(7)    The rights and remedies provided by this Ordinance shall be in addition to any other 
rights and remedies available under any other law for the time being in force. 
24.   Penalty. (1) Whoever contravenes the provisi ons of section 17 shall be punishable 
with imprisonment for a term which may exte nd to three years, or with fine which may 
extend to [five hundred]109 thousand rupees, or with both. 
(2)    Where the person guilty of an offence re ferred to in sub-section (1) is a company or 
other body corporate, every director, manager or other officer responsible for the conduct 
of its affairs shall, unless he proves that the offence was committed without his 
knowledge or that he exercised all diligence to  prevent its commission, be deemed to be 
guilty of the offence. 
25.   Cognizance of offence .- No court shall take cognizan ce of any offence punishable 
under this ordinance except on a report in writing of the fact s constituting the offence by 
an officer authorised in this behalf by the [Commission]
110; and no court inferior to that 
of a court of Session shall try any such offence. 
26.  [Omitted]111   
 
 
 
CHAPTER VI 
MISCELLANEOUS 
                                                
 
109 Substituted for “thirty” through Securities and Exchange (Amendment) Ordinance, 2000. Earlier “thirty” 
was substituted for “ten” through Securities and Exchange (Amendment) Ordinance, 2000. 
110 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
111 Section 26 omitted through Securities and Exchange (Amendment) Ordinance, 2000. Before omission it 
read as follows: 
“26. Revision and Review.- (1) Any order passed or made under this Ordinance by an officer or authority 
subordinate to the Federal Government or exercising the powers of the Federal Government in pursuance of 
a directive of under section 28 shall be subject to revision by the Federal Government upon application 
being made by any aggrieved person within ninety days from the date of such order; and the Federal 
Government’s order in revision shall be final. 
 
(2) The Federal Government may, upon an application being made to it within a period of six months 
from the date of the order passed by it otherwise than in revision under sub-section (1) or on its on motion, 
review such order; and the Federal Government’s order in review shall be final.” 
27.   Advisory Committee.-   The [Commission] 112 may, for the purpose of obtaining 
advice and assistance in carrying out the purpos es of this Ordinance, constitute an 
Advisory Committee consisting of such person s representing interests affected by this 
Ordinance or having special knowledge of the subject-matter thereof as it may think fit. 
28.  [Omitted]113   
29.   Exemption.- The [Commission] 114 may, by notification in the official Gazette, 
exempt any person or class of  persons or any security or  class of securities or any 
transaction or class of transac tions from the operation of a ll or any of the provisions of 
this Ordinance. 
30.   Indemnity.- No suit, prosecution or other lega l proceedings shal l lie against the 
[Commission]115 or an officer or authority subordinate  to it or specially  appointed for the 
purpose of this Ordinance for anything which is in good faith done or intended to be done 
under this Ordinance or any rules or orders made thereunder. 
31.   Securities acquired in good faith.-   (1)   A person who, without fraud and for a 
lawful consideration, becomes the possessor of a certificate of  an e quity security, scrip, 
debenture, debenture stock or bond, and who is without notice that the title of the person 
from whom he derived his own title was de fective shall hold such certificate and all 
rights attached thereto free from any defect of title of prior parties and free from defences 
available to prior parties among themselves.   
 (2)    [An] 116  Exchange may regulat e the documentation, pro cedures and guarantees 
required to transfer property in securities and the effects thereof on the respective rights 
and liabilities of the parties  and such  regulations, if approved by the [Commission] 117 , 
shall constitute binding and enforceable terms and conditions of contracts effected on the 
exchange, shall govern the rights and liabilities of the parties thereto, and shall govern the 
rights and liabilities with respect to transfers of shares on its books of the issuer of listed 
                                                 
112 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
113 Section 28 omitted through Securities and Exchange (Amendment) Ordinance, 2000. Before omission it 
read as follows: 
“28. Delegation of Power.- [(1)] The Federal Governme nt may, by notification in the Official Gazette, 
direct that all or any of its powers and functions under this Ordinance may, subject to such limitations, 
restrictions or conditions, if any, as it may from time to time impose, be exercised or performed also by any 
officer or authority subordinate to it or specially appointed for the purpose. 
 
[(2)] Where the Federal Government has, under sub-section (1), directed that any of its powers and 
functions shall be exercised or performed also by any specified authority, such authority may by 
notification in the official Gazette, di rected that any of the sa id powers and functions  may, subject to such 
limitations, restrictions or conditions, if any, as it may from time to time impose, be exercised or performed 
by any officer  of the authority specified by it.” 
Section 28 renumbered as sub-section (1) and sub-section (2) inserted through Companies Ordinance, 1984. 
114 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
115 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
116 Substituted for “a stock” through Finance Act, 2006. 
117 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
securities notwithstanding any provisions to th e contrary contained in  the Contract Act, 
1872 (IX of 1872), the Negotiable Instruments Act, 1881 (XXVI of 1881), the Transfer 
of Property Act, 1882 (IV of 1882) or the Co mpanies Ordinance, 1984, or any other law 
for the time being in force. 
[32.     Regulation of business of asset manage ment companies, investment advisers, 
investment companies and venture capital companies .-  The business of  asset 
management companies, investment advise rs and investment companies and venture 
capital companies shall be regulated in such manner as may be prescribed.]
118  
[32-A. Regulation of central depository companies.- (1) No company shall function as 
a central depository company unless it is inco rporated under the Companies Ordinance, 
1984 (XLVII of 1984), and is registered with  the Authority in the manner and on 
payment of such fee as may be prescribed. 
 (2)    A certificate of registration granted under this section shall be valid for one year 
and shall be renewable on payment of such fee as may be prescribed.]119 
(3)    No application for registration shall be refused except after giving the applicant an 
opportunity of being heard. 
(4)    Where the Authority is of the opi nion that a central depository company has 
contravened any provision, or has otherwise neglected or failed to comply with any 
requirement of this Ordinance or the rules, the Authority may suspend the registration for 
a specified period or cancel the registration of such company: 
  Provided that the registrati on shall not be suspended or ca nceled except after giving the 
central depository company a notice to show cause. 
[32-B.      Registration of credit rating companies.- (1) No company shall function as a 
credit rating company unless it is incor porated under the Compan ies Ordinance, 1984 
(XLVII of 1984), and is register ed with the Authority in the manner and on payment of 
such fee as may be prescribed. 
 (2)    A certificate of registration granted under this section shall be valid for one year 
and shall be renewable on payment of such fee as may be prescribed. 
                                                 
118Section 32 substituted through Securities and Exch ange (Amendment) Ordinance, 2000.  Before 
substitution it read as follows: 
“32. Regulation of business of asset management companies, investment advisors and investment 
companies.- The business of asset management companies, investment advisors and investment companies 
shall be regulated in such manner as may be prescribed.” 
 
Section 32 was earlier substituted through Securities and Exchange (Amendment) Ordinance, 1994.  Before 
substitution it read as follows: 
“32. Regulation of business of investment advisors and asset management companies.- The business of 
investment advisors and investment companies shall be regulated in such manner as may be prescribed.” 
119Section 32A inserted through Securities and Exchange (Amendment) Ordinance, 1994. 
 (3)    No application for registration shall be refused except after giving the applicant an 
opportunity of being heard. 
(4)    Where the Authority is of the opini on that a credit rating company has contravened 
any provision, or has otherwise neglected or failed to comply with any requirement of 
this Ordinance or the rules, the Authority may suspend the registration for a specified 
period or cancel the registration of such company: 
       Provided that the registration shall not  be suspended or cancelle d except after giving 
the credit rating company a notice to show cause.]120 
[32-C.      Regulation of business of transf er agents, balloters and underwriters, etc.- 
(1) The business of transfer agents, balloters, underwriters, sub-underwriters, consultants 
to a public issue and other ancillary business relating to stock market shall be regulated in 
such manner and on payment of such fees and charges as may be prescribed.]121   
[32-D. Regulation of business of Commodity Futures Contract.- The business of 
Commodity Futures Contract shall be regula ted in such manner and on payment of such 
fees and charges and may be prescribed.]122  
123[32E. Corporatisation, demutualisation a nd integration of the stock exchanges.- 
(1) Notwithstanding anything in any other law for the time being in force, the stock 
exchanges shall stand corporati zed and demutualised from 31 st December, 2006 or from 
such later date as may be specified by the Commission, in such manner and in accordance 
with such conditions as may be prescribed. 
 
[(1A) Without prejudice to the generality of the foregoing po wer and sub-section (2) of 
section 33, the rules made in pursuance of this section may inter alia provide for— 
 
(a) the matters to be included in any scheme of demutualization and 
corporatization and the manner of its approval by the members of the 
stock exchange; 
 
(b) the power of the Commission to appr ove any scheme of demutualization 
and corporatization including the power to impose any conditions;
  
 
(c)  the process and procedure to be fo llowed for purposes of demutualization 
and corporatization; 
 
(d) matters regarding appointment of dir ectors and chairman of the board of a 
stock exchange after demutuali zation, including but not limited to 
restrictions, if any, on such appointments; 
                                                
 
120 Section 32B inserted through Securities and Exchange (Amendment) Ordinance, 1994. 
121 Section 32C inserted through Securities and Exchange (Amendment) Ordinance, 2000. 
122 Section 32D inserted through Finance Act, 2003. 
123 Section 32E inserted through Finance Act, 2006. 
 
(e) restriction of rights, if any, attach ed to the shares issued pursuant to 
corporatization; 
 
(f) matters including restrictions, if an y, on disinvestment, further issue and 
sale and purchase of shares of a stock exchange after demutualization; 
 
(g) matters regarding limits or restri ction on holding of shares by different 
categories of shareholders of a stoc k exchange, and the requirement for 
divestment of shares by shareholders in particular circumstances; and 
 
(h) matters regarding trading rights on a stock exchange and restrictions if any 
in this regard.]
124 
 
(2) From the date of effect of corporatisat ion and demutualization as aforesaid, no stock 
exchange shall undertake any activity unless it is corporatised and demutualised. 
 
(3) Any two or more stock exchanges may, up on filing a scheme of integration to the 
Commission for its approval, in such manner and in accordance with such conditions as 
may be prescribed, be merged so as to tr ansfer to and vest in the successor stock 
exchange, all the assets, unde rtaking, liabilities, rights and obligations of any stock 
exchange which, upon such merger, is proposed to cease to exist. 
 
(4) Without prejudice to the provisions of sections 7 and 22, the Commission may, by 
notice in writing, for the purpos e of effecting the corporatis ation and demutualisation of 
the stock exchanges, issue such directions to the stock exchanges, including in respect of 
their memorandum and articles of association, their management and the transfer of their 
shares or business, as the Commission may deem expedient. 
 
(5) Where a stock exchange fails to comp ly with any directions issued by the 
Commission under sub-section (4), such stock ex change shall be liable to be fined by the 
Commission by an amount not exceeding one hundred thousand rupees.] 
 
33.   Power to make rules.- (1)  The [Federal Government]
125 may, by notification in the 
official Gazette, make rules for carrying out the purposes of this Ordinance. 
(2) In particular and without prejudice to th e generality of the foregoing power, such 
rules may provide for - 
                                                 
124 Sub-section (1A) inserted through Finance Act, 2008 dated June 27, 2008. 
 
125 Substituted for “Central Government” through President’s Order no. 4 of 1975. 
(a)    any of the matters wh ich are to be or may be prescribed for the purposes of 
clause (d) of section 2 and section   4, 5, [5A,] 126 6,  9, 11, 12, 15, 16 127[, 
32, 32A, 32B, 128{32 C and 32 E}];  and  
(b)   any of the matters with respect to which [the] 129 Exchange may make 
regulations. 
      
34.   Power to make regulations.- (1)  [An] 130 Exchange may, subject to the previous 
approval of the [Commission]131, make regulations not inconsistent with the rules to carry 
out the purposes of this Ordinance. 
(2)    In particular and without prejudice to the generality of the foregoing power, such 
regulations may provide for all or any of the following matters, namely:- 
(i) constitution, powers an d functions of the gove rning body of the[  ] 132  
Exchange; 
(ii)    qualification for membership of the [  ] 133 Exchange; admission, suspension 
and expulsion of members; disciplinary  matters, including punishment of the 
members; 
(iii)   classification of members into categories with regard  to- 
 (a)   whether they are or are not active in dealings on the [  ]134 Exchange, 
(b)  whether they have or have not a place of business in the city where the 
[]135 Exchange is located, and 
(c)  whether a substantial part of th eir business is in listed or unlisted 
securities; 
(iv)   a member’s financial responsibility whether by wa y of minimum capital or a 
ratio between net capital or aggregate indebtedness, or both; 
                                                 
126 Inserted through Securities and Exchange (Amendment) Ordinance, 2000. 
127 Inserted through Securities and Exchange (Amendment) Ordinance, 2000. 
 
128 Substituted for “and 32C” through Finance, Act, 2006.  
129 Substituted for “an” through Finance, Act, 2007. 
130 Substituted for “a stock” through Finance Act, 2006. 
131 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
132 The word “Stock” omitted through Finance Act, 2007. 
133 The word “Stock” omitted through Finance Act, 2007. 
134 The word “Stock” omitted through Finance Act, 2007. 
135 The word “Stock” omitted through Finance Act, 2007. 
(v)    regulation of dealing by members for their own account; me thod of  soliciting 
business by members; manner of mainta ining books of accounts and financial 
reports by members; 
(vi)   methods of selection of officers and committees to ensure a fair representation 
of the membership; 
(vii)  qualifications and functions of the directors, officers and other functionaries of 
the [  ] 136 Exchange; disciplinary matters, including punishment of the 
directors, officers and functionaries; 
(viii) listing and delisting of securities; 
(ix)   the procedure for regi stration of an issuer and part iculars to be furnished for 
the purpose; 
(x)    regulation of days and hours of trading in securities; suspension of trading; 
(xi)   types of contracts and settlements in the [  ] 137 Exchange and regulation of 
contracts generally, including the conse quences of default or insolvency; 
confirmation of contracts; 
(xii)  regulation of forward trading, badlas and carry over facilities in relation to 
transactions and securities; 
(xiii) manner of making and publishing quo tations, fixing of trade units and 
differentials and publication of transactions both individually and by  volume; 
(xiv) setting up of a clearing house in relation to transactions in securities; 
(xv)  regulation of fictitious and numbere d accounts; blank transfers, short sales, 
options, odd lots and margins, in relation to transactions and securities; 
(xvi) lending and [pledging]138 of customers’ securities; 
(xvii) regulation of broker ages and other charges, in cluding fixation of minimum 
commission; 
(xviii)separation of the functions of broker and jobber; 
(xix) procedure for the settlement of claims or disputes, including  arbitration; and 
                                                 
136 The word “Stock” omitted through Finance Act, 2007. 
137 The word “Stock” omitted through Finance Act, 2007. 
138 Substituted for “hypothecation” through Securities and Exchange (Amendment) Ordinance, 1980.  
 
(xx)  any other matter for which a regulation is required to be or may be made. 
(3)    All regulations made under this section shall be published in the official Gazette and 
shall take effect upon such publication. 
 (4)   Where the [Commission] 139 considers it expedient so to do, it may, by order in 
writing, direct [an] 140 Exchange to make any regulati on, or to amend or rescind any 
regulation already made, within such period as it may specify in this behalf. 
(5)    If an Exchange fails or neglects to  comply with any direction under sub-section (4) 
within the specified period, the [Commission] 141 may make or amend, with or without 
modifications, or rescind, any regulation direct ed to be made, amended or rescinded; and 
a regulation so made, amended or rescinded by  the [Commission] 142 shall be deemed to 
have been made, amended or rescinded by the Exchange in accordance with the 
provisions of this section and shall have effect accordingly. 
[ omitted ]143 
 
                                                 
139 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
 
140 Substituted for “a stock” through Finance Act, 2006. 
 
141 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
 
142 Substituted for “Federal Government” through Securities and Exchange (Amendment) Ordinance, 2000. 
 
143 Section 35 omitted through Finance Act, 2007. Before omission it read as follows: 
“35. Savings.- (1) A Stock Exchange which, immediately before the commencement of this Ordinance, 
was functioning shall be deemed to be registered under this Ordinance. 
 
(2) Any security which immediately before the commencement of this Ordinance, was stood listed on 
any Stock Exchange shall be deemed to have been listed under this Ordinance. 
 
(3) Any rule, regulation, by-law or order made or issued by a Stock Exchange which immediately 
before the commencement of this Ordinance, was in force,  shall, in so far as it is not inconsistent with the 
provisions of this Ordinance, continue in force as if made or issued under this Ordinance.”