The Securities and Exchange Commission of Pakistan Act, 1997

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, mortgage, 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.
(3)20 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 sub-section (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 seven. 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 Commission.
(4) The Commissioners, including the Chairman, shall be paid such remuneration
and allowances as the Commission may, with the approval of the Board,
determine.

(5) No act, proceeding or decision of the Commission shall be invalid by reason

only of the existence of a vacancy in, 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 Commissioner shall
be appointed Chairman for 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, subject to the regulations
made by the Commission, be assisted by the other Commissioners in carrying out
the functions of the Commission.

6A.21 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 Commissioners”) shall hold office for a term of two
years, shall retire on the expiration of that term and may be re-appointed 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 re-appointed for a further term of three years.
(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 Commissioners, 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 the 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
three-year unless, being eligible for re-appointment, he is re-appointed.

(3) Notwithstanding anything contained in sub-sections (1) and (2),–

(a) a person who, on the date of his appointment is more than sixty-two years of
age, shall not be appointed as a Commissioner; and

(b) a Commissioner shall cease to hold office attaining the age of sixty-five 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 remuneration 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 liable 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 sub-section (2), the

Commission may, employ and pay consultants and agents and technical,
professional and other advisers including, without limitation, bankers, stock-
brokers, 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.

(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 under this Act or any administered
legislation22 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.

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 [eleven]

24 Members.

(2) Of the Members-

(a) [five] shall be-

[(i)] ex officio the Secretary to the Government of Pakistan, Finance Division;

(ii) ex officio the Secretary to the Government of Pakistan, Law Division;

(iia) ex officio Secretary to the Government of Pakistan, 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

(b) [six]

25

appointed by the Federal Government from private sector each of whom is wellknown 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[, insurance] , banking, academia or other related relevant fields of

expertise:

26

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.27

(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 four-year term but not more.

28

[Omitted]

29

(4) An ex-officio 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 ex-officio 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.

23 Section (11A) inserted through SECP (Amendment) Act, 2016 (XXXVI of 2016) dated
August 6, 2016

24 Amended through SECP (Amendment) Act, 2016 (XXXVI of 2016) dated August 6, 2016

25 Amended through SECP (Amendment) Act, 2016 (XXXVI of 2016) dated August 6, 2016

26 Amended through SECP (Amendment) Act, 2016 (XXXVI of 2016) dated August 6, 2016

27 Proviso inserted through SECP (Amendment) Act, 2016 (XXXVI of 2016) dated August 6,
2016

28 Amended through SECP (Amendment) Act, 2016 (XXXVI of 2016) dated August 6, 2016

29 proviso omitted through SECP (Amendment) Act, 2016 (XXXVI of 2016) dated August 6,
2016

Page 7 of 47

(6) If an ex-officio 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.

(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 five30 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 committees) 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.

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 meetings of a
committee

shall be held at such times and places as the chairman of the committee may determine.

(4) The Members, other than ex-officio Members, Commissioners 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.