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SHC dismisses bourses' plea against electronic exchange registration

KARACHI (November 26 2005): The Sindh High Court has dismissed the stay application filed by the three stock exchanges to cancel the licence for an electronic stock exchange upon filing of hand-written statement from counsel of Securities and Exchange Commission of Pakistan (SECP) “that application of PEX for setting up an electronic exchange shall be deemed to be pending”.

The SECP had issued a licence for a new bourse on February 13, 2003, to PEX Limited. The existing stock exchanges felt that “registration on permission was granted in undue haste and was in violation of due process and fairness”.

Application for an interim stay was filed and the case was adjourned several times. However, SHC did not grant stay nor quashed the grievance applications.

On Wednesday last, the case was up for hearing before Justice Gulzar Ahmad. SECP's counsel Muhammad Afzal Siddiqui, Advocate, reportedly filed the following statements:

"It is the right of any party to apply for registration as stock exchange. PEX applied for registration as an 'electronic' stock exchange in exercise of its statutory right.

“It is obligation of SECP to consider all the applications strictly on merits, in due process and in a transparent manner and only in accordance with law.

“In this case, plaintiff (all three stock exchanges) have made central grievances of undue haste in grant of registration within a few days and thus deem it to be in violation of 'due process' and fairness.

“Over the last two years, further progress in the matter of future composition of stock exchanges is undergoing a rapid change to meet global fiscal requirements and the present stalemate is not helping in any manner.”

The statement said that SECP “is willing to make a statement so as to satisfy all parties and to enable to proceed with statutory duties/obligations.”

The statement said: “Application of PEX for setting up an electronic stock exchange shall be deemed to the proceedings, all shareholders including plaintiffs would be free to join the proceedings and raise any objections whatsoever and application of PEX would be dealt with strictly in accordance with law in a transparent manner and in due process. “In view of the above statement, the suit and application may kindly be disposed of.”

Responding to the above statement, the senior counsel for KSE, LSE, ISE, Barrister Khalid Anwar did not press his suit.

THE BENCH HAS REPORTEDLY ISSUED THE FOLLOWING ORDER: “A hand-written statement is filed by the counsel for the defendant No 2 (SECP), copy of which has been supplied to the counsel for the plaintiff as well as to the counsel for defendant No 1 (PEX Limited) in Court now. Khalid Anwar, learned counsel for the plaintiff states that he has gone through the statement and does not press this suit. Iqbal Bawany on the other hand states that he has reservation/objection to the statement filed by the counsel of the defendant No 2. Without prejudice to the reservation/objection that the defendant No 1 may have, as Khalid Anwar does not press the suit, the suit is dismissed as such with no order as to costs. The pending applications are also disposed of.”

THE FOLLOWING PRAYER WAS SOUGHT BY THE PLAINTIFF (STOCK EXCHANGES) IN THE SAID SUIT:

(a) Declare the letter dated February 14, 2003 issued by the defendant No 2 (SECP) granting registration and permission to (PEX Limited) aqs unlawful, void, inoperative and of no legal effect.

(b) Declared that any acts undertaking or perform or propose to be undertaken or perform under the letter dated 14.02.2003 by any person (including PEX Limited) to act or function as a stock exchange or make available any facilities of stock exchange or take any action of any nature whatsoever thereunder or in respect thereof are and/or would be unlawful, void and of no legal effect.

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