It is learnt here on Tuesday that as a part of stringent surveillance practices to curb unfair market practices and to bring transparency in securities market, the SECP issued two orders under Section 22, of the Securities and Exchange Ordinance 1969 against the brokers of Karachi Stock Exchange Limited namely DJM Securities (Pvt) Limited and Zillion Capital Securities (Pvt) Limited. In the said instances a penalty of Rs 200,000 each was imposed on both the Brokers.
The perusal of trading data of Karachi Stock Exchange Limited from August 27, 2012 to September 04, 2012 by the Commission transpired that DJM Securities (Pvt) Limited bought and sold 87,200 shares and Zillion Capital Securities (Pvt) Limited bought and sold 98,800 shares of Philip Morris (Pakistan) Limited in their proprietary accounts during the Period. From total number of shares traded by both the brokers 72,400 shares were matched with each other. The analysis of order level data showed that two Brokers placed buying and selling orders at the same time and in such a manner that these match with each other. During the time of their trading, volatility in the share price was witnessed which ranged between Rs 138.50 to Rs 157.95.
Official said that the matter was taken up with both the Brokers and subsequently Show Cause Notices were issued to them. During the course of hearing both the Brokers claimed that they were unaware of above-mentioned transactions as same were conducted by their KATS Operators.
From the facts evidence/information available on record, it was established that DJM Securities (Pvt) Limited and Zillion Capital Securities (Pvt) Limited created a false and misleading appearance of active trading in the scrip of Philip Morris (Pakistan) Limited and executed the transactions which involved no change in its beneficial ownership. The brokers failed to exercise due care, skill and diligence in conduct of business and also failed to abide by the provisions of the Rules & Regulations issued by the Commission and KSE, the SECP order added.