RULE 2010

6. Audit of accounts.—The accounts of the Board shall, at the close of each financial year, be audited by the Auditor-General of Pakistan. The Board shall meet all audit requirements in respect of payments and procurements made and for actions of any committee constituted for such purposes.

7. Observance of law in procurements.—All procurements by the Board shall be made in accordance with the provisions of the Public Procurement Regulatory Authority Ordinance, 2002 (XXII of 2002) and the rules and regulation's made thereunder.

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RULES, 2010

THE PROTECTION AGAINST HARASSMENT OF WOMEN AT THE WORKPLACE RULES, 2010

[Gazette of Pakistan, Extraordinary, 15^th January, 2011]

S.R.O. 41 (I)/2011.—In exercise of the powers conferred by Section 13 of the Protection Against Harassment of Women at the Workplace Act, 2010 (IV of 2010), the Federal Government is pleased to make the following rules, namely:—

1. Short title and commencement.—(1) These rules may be called the Protection against harassment of women at the workplace Rules, 2010.

(2) They shall come into force at once.

2. Definitions.—(1) In these rules, unless there is anything repugnant in the subject or context,—

(a) "Act" means the Protection against Harassment of women at the Workplace Act, 2010 (IV of 2010);

(b) "District Court" means the Court of a District Judge established under the West Pakistan Civil Courts Ordinance, 1962 (W.P. Ordinance No. II of 1962); and

(c) "Ombudsman" means an Ombudsman appointed under Section 7 of the Act by the Federal Government at Federal level and by a Provincial Government for respective Province, as the case may be;

(2) The words and expressions used but not defined in these rules shall have the same meaning as assigned to them in the Act.

3. Designation of the competent authority.—(1) Each organization shall designate a competent authority under sub-section (4) of Section 3 of the Act.

(2) A copy of the order designating the competent authority shall within seven days of its issuance be sent to the Ombudsman, Federal Government and the respective Provincial Government, as the case may be, and shall also be circulated to all employees of the organization by the organization.

(3) No discrimination on the basis of gender shall be made in designating a competent authority.

4. Filing a complaint.—(1) A complainant may address a complaint either to the Inquiry Committee through any of its members or the Ombudsman under sub-section (1) of Section 8 of the Act.

(2) The employer shall be informed by the Inquiry Committee or the Ombudsman about filing of the complaint immediately after its filing or receipt with direction of strict confidentiality.

(3) The complainant may withdraw, with the permission of Inquiry Committee, his or her complaint at any stage before any decision thereon,

5. Contents of the complaint.—(1) The complaint may contain,—

(a) comprehensive statement of all facts relating to an incident of harassment at the workplace with all necessary details;

(b) all documents, evidence or other supporting material in whatever form it may be, such as audio, video or documentary or in any other form;

(d) any other material, detail, evidence or person which will be relied upon or having any relation with the incident.

(2) The complainant shall undertake that information contained in his or complaint is true and correct to the best of his or her knowledge and belief.

(3) A party may amend his or her complaint or defence statement, as the case may be, at any stage of the inquiry.

(4) The complaint shall be duly signed by the complainant or if he or she cannot sign shall affix thumb impression.

6. Inquiry Committee.—(1) Each organization shall constitute one or, if required more, Inquiry Committee as specified in Section 3 of the Act.

(2) The appointment of members shall be based on the credibility and gender sensitivity of the particular individual.

(3) Where any person resigns from membership of the inquiry committee owing to his or her transfer from or leaving the organization or inability to perform his or her functions due to any other reasonable cause, another person shall be appointed as member in his or her place by the organization.

7. Procedure of Inquiry Committee.—(1) Subject to Section 4 of the Act, the Inquiry Committee shall—

(a) ensure a non-discriminatory environment for holding an inquiry;

(b) ask for documents or other information relating to incident of reported harassment and consider the same;.

(c) not make public any document or statement of any party to inquiry and maintain high standards of confidentiality as provided under clause (a) of sub-section (3) of Section 4 of the Act; and

(d) make suitable arrangements for safe custody of all documents, record or other material relating to inquiry proceedings.

(2) All documents, information, record, proceedings and findings of the Inquiry Committee shall be confidential and no copies thereof shall be provided to any person not related to the case under the rules or Act.

8. Recommendations and findings.—(1) The recommendations and findings of the Inquiry Committee shall be, comprehensive and supported with logical arguments and substantiated by available evidence if any.

(2) The findings and recommendations of Inquiry Committee shall also recommend major or minor penalties, as provided in sub-section (4) of Section 4, with justifications for imposition of such penalty or fine.

(3) The Inquiry Committee may also recommend suitable compensation to the aggrieved person in case of loss of salary or other damages.

(4) The Inquiry Committee may provide copy of its report to both the parties free of cost.

9. Imposition of penalty.—(1) On receipt of the recommendations and findings of the Inquiry Committee or the Ombudsman, the competent authority shall impose the penalty recommended by the Inquiry Committee or Ombudsman within one week of the receipt of the recommendations and findings or otherwise refer back the case to Inquiry Committee with observations to be addressed immediately.

(2) The copies of the final order or notification containing a penalty imposed under sub-rule (1) shall be forwarded to the accused and the complainant as well as to the Inquiry Committee or the Ombudsman, as the case may be.

10. Procedure before the Ombudsman.—(1) The show cause notice under sub-section (2) of Section 7 of the Act shall contain allegations levelled against the accused by the complainant and be accompanied with a copy of the complaint.

(2) On receipt of written defence of the show cause notice, the Ombudsman shall formulate conclusions to reach some recommendations or findings.

(3) Where the Ombudsman is unable to reach any conclusions as mentioned in sub-rule (2), he shall issue a notice summoning the parties to appear before him on the time and date prescribed in such notice.

(4) On the time and date as prescribed under sub-rule (3), the accused and the complainant shall appear before the Ombudsman with all supporting material, documents, information or other substantial evidence in their custody.

(5) The Ombudsman may also call witnesses, any record from any authority, organization of the accused and the complainant or any other person having some information or document to appear before him and produce such documents, information or to give oral evidence before the Ombudsman.

(6) On perusal of the documents, evidence of the witnesses and hearing the parties, the Ombudsman shall formulate his recommendations and findings.

(7) In the absence of any express provision regarding conduct of proceedings or inquiry, the Ombudsman shall have the power to conduct the proceedings or inquiry as he deems fit and just according to circumstances of the case to arrive at a conclusion and formulate his recommendations and findings in the case.

(8) The Ombudsman shall decide a case under the Act as expeditiously as possible; and send a copy of his decision for implementation to the competent authority.

(9) The recommendations, findings and decisions of the Ombudsman shall be comprehensive and supported with logical arguments and substantiated by available evidence.

(10) The decision of the Ombudsman shall also clearly mention major or minor penalties as provided in sub-section (4) of Section 4 of the Act with justifications for imposition of such penalty.

(11) The copies of the decision shall be sent to the competent authority and to both the complainant and the accused.

(12) The management or the competent authority of an organization shall implement the orders of the Ombudsman as directed by the Ombudsman within fourteen days from the receipt of the orders or within the period specified by the Ombudsman and shall within five days after execution of such order inform the Ombudsman, the accused and the complainant of such implementation.

11. Staff of the Ombudsman.—(1) The Ombudsman may recruit and appoint such persons as his staff which is necessary to carry out and perform functions of his office appropriately.

(2) The Ombudsman in consultation with the Federal Government or the respective Provincial Government in the case of a Province may determine terms and conditions of service of persons recruited as his staff

(3) The Ombudsman shall decide all matters regarding persons of his staff, their terms and conditions of service.

(4) The Federal Government or the Provincial Government, as the case may be, shall provide all necessary finances to the Ombudsman as provided under sub-section (2) of Section 7 of the Act.

12. Financial provisions for the Ombudsman and his staff.—The Federal Government or the respective Provincial Government shall make necessary budgetary provisions for the Ombudsman, staff of his office and for all other necessary matters for smooth functioning of the office of the Ombudsman.

13. Psycho-social counselling or medical treatment or additional medical leave.—The Inquiry Committee or the Ombudsman may, to the employer recommend appropriate remedial measures in cases where the complainant or the accused is in a state of trauma, depression or other psychological shock.

14. Advice and counselling to parties.—(1) Nomination of an officer to provide necessary advice and assistance to each of the complainant and the accused under clause (b) of sub-section (3) of Section 4 of the Act, the employer may appoint a counselling officer possessing knowledge of law, human psychology, friendly and mature social behaviour and who shall impartiality render the advice and assistance.

(2) The counselling officer may recommend all necessary steps to the employer for avoidance of harassment of any kind at work place in the light of socio-cultural requirements of the area and organization.

15. Form of Appeal.—(1) Every person preferring an appeal under Section 6 of the Act shall do so separately and in his or her own name.

(2) Every appeal preferred under the Act shall contain all material statements and arguments relied upon by the appellant.

(3) The appeal shall be complete in all respect and shall not contain any matter which is derogatory and accusatory or disrespectful or in improper language.

(4) Every appeal shall be submitted directly to the appellate authority.

(5) The contents of the appeal shall be verified by the aggrieved party to be true to his or her knowledge and belief and signed or affixed with thumb impression.

16. Representation to the President.—(1) Any person, working under an employer administered and controlled by the Federal Government or under any Federal law and aggrieved by a decision of Ombudsman under sub-section (5) of Section 8 of the Act, may make a representation to the President.

(2) The representation shall be filed within thirty days of decision.

(3) The representation shall contain all material statements and arguments relied upon by the aggrieved person with all supporting documents.

(4) The representation shall be complete in all respect and shall not contain any matter which is derogatory or accusatory or disrespectful or in improper language.

(5) The representation shall be addressed to office of the President and posted through mail or by any other suitable method.

(6) The order of the President shall be communicated to both the parties, the Appellate Authority or Ombudsman as well as the employer or management of the organization.

(7) There shall be no appeal against the orders of the President and it shall be final.

17. Representation to the Governor.—(1) Any person, working under an employer or in an organization administered and controlled by a Provincial Government or under any Provincial law and aggrieved by a decision of Ombudsman under sub-section (5) of Section 8, may make a representation to the Governor of the Province.

(2) The representation shall be filed within thirty days of decision.

(3) The representation shall contain all material statements and arguments relied upon by the aggrieved person with all supporting documents.

(4) The representation shall be complete in all respect and shall not contain any matter which is derogatory or accusatory or disrespectful or in improper language.

(5) The representation shall be addressed to the office of the Governor and posted through mail or by any other suitable method.

(6) The order of the Governor shall be communicated to both the parties, the Appellate Authority or Ombudsman as well as the employer or management of the organization.

(7) There shall be no appeal against the orders of the Governor and it shall be final.

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RULES, 2011

SECURITIES (LEVERAGED MARKETS AND PLEDGING) RULES, 2011

[Gazette of Pakistan, Extraordinary, Part-II, 18^th February, 2011]

S.R.O. 128(I)/2011.—In exercise of the powers conferred by Section 33 of the Securities and Exchange Ordinance, 1969 (XVII of 1969) read with Section 16 thereof and clause (b) of Section 43 of the Securities and Exchange Commission of Pakistan Act, 1997 (XLII of 1997) and having been previously published in the official Gazette vide Notification No. S.R.O. 384(I)/2010, dated the 3rd June, 2010, as required by sub-section (2) of Section 39 of the said Act XLII of 1997, the Securities and Exchange Commission of Pakistan with the approval of the Federal Government, hereby makes the following rules, namely:—

CHAPTER I

PRELIMINARY

1. Short title and commencement.—(1) These rules may be called the Securities (Leveraged Markets and Pledging) Rules, 2011.

(2) They shall come into force at once.

2. Definitions.—(1) In these rules, unless there is anything repugnant in the subject or context,—

(a) "Annexure" means Annexure to these rules;

(b) "authorized intermediary" means any person referred in sub-rule (2) of Rule 3 registered with the Commission as an authorized intermediary under these rules;

(c) "borrower" means a person who borrows securities under these rules from a lender through the platform provided by an authorized intermediary for the purpose of securities lending and borrowing transactions;

(d) "clearing company" means a company registered as a clearing house under the Clearing Houses (Registration and Regulation) Rules, 2005;

(e) "financee" means the person availing the facility of margin financing or margin trading;

(f) "lender" means a person who lends securities to a borrower through the platform provided by an authorized intermediary for the purpose of securities lending and borrowing transactions;

(g) "leveraged market" means the market for offering any of the leveraged market contracts;

(h) "leveraged market contracts" means contracts relating to each of margin financing, margin trading and securities lending and borrowing;

(i) "leveraged market participants" means any of the parties to leveraged market contracts or a person offering any leveraged market contract;

(j) "margin financier" means such person registered and allowed under these rules to provide margin financing;

(k) "margin financing" means extension or maintenance of credit for the purpose of purchasing or carrying any security through an authorized intermediary, as provided in Chapter III;

(l) "margin financing agreement" means an agreement executed between the margin financier and the financee for the purpose of margin financing;

(m) "margin trading" means extension or maintenance of credit through the platform provided by an authorized intermediary for the purpose of purchasing or carrying any security, as provided in Chapter IV;

(n) ''Ordinance" means the Securities and Exchange Ordinance, 1969 (XVII of 1969);

(o) "regulations" means regulations made by—

(i) a stock exchange, under the Ordinance; or

(ii) a central depository, under the Central Depositories Act, 1997; or

(iii) a clearing company, under its bye-laws, for the respective leveraged market contracts with the previous approval of the Commission;

(p) "securities lending and borrowing" means lending of securities by the lender and borrowing of securities by the borrower, through platform provided by an authorized intermediary, as provided in Chapter V;

(q) "significant shareholder" means a person holding, directly or indirectly, ten percent or more shares in a company;

(r) "spot period" means the trading period as notified by the stock exchanges prior to the commencement of book closure; and

(s) "trading financier" means such person registered and allowed under these rules to provide financing under margin trading.

(2) All other words and expressions used but not defined in these rules shall, unless there is anything repugnant in the subject or context, have the same meanings as assigned to them under the Ordinance, the Companies Ordinance, 1984 (XLVII of 1984) and the Central Depositories Act, 1997 (XIX of 1997).

CHAPTER II
AUTHORIZED INTERMEDIARIES

3. Authorized intermediary.—(1) The Commission shall determine the number and places for the establishment of authorized intermediaries.

(2) A stock exchange, central depository or clearing company desirous of providing a platform to facilitate transactions relating to any of the leveraged market contracts may make an application to the Commission for the purpose of acting as an authorized intermediary for the respective leveraged market contracts.

(3) The application under sub-rule (2) shall be accompanied by—

(a) copies of documents showing the registration of the applicant as a stock exchange, central depository or a clearing company, as the case may be;

(b) copies of Memorandum and Articles of Association;

(c) particulars of its chief executive officer and directors including their parentage, computerized national identity card numbers, residential addresses, directorships in other companies and significant shareholding in other companies;

(d) list of its members in case of a company having no share capital and significant shareholders in case of a company having share capital;

(e) documents showing that satisfactory internal controls and written compliance procedures are available to act as authorized intermediary for the respective leveraged market contracts;

(f) documents showing that adequate financial, technical, organizational and human resources are available to facilitate the activity of the respective leveraged market contracts in a proper and efficient manner, on an ongoing basis;

(g) a draft of regulations governing the respective leveraged market contracts;

(h) the fee as specified by the Commission; and

(i) such other document as may be required by the Commission.

(4) Upon receipt of the application under sub-rule (2) and the documents specified under sub-rule (3), the Commission, if satisfied that—

(a) the applicant is eligible for acting as authorized intermediary;

(b) the applicant is in compliance with all applicable regulatory requirements and conditions; and

(c) it is in the interest of the capital market for the applicant so to do, may register the applicant as an authorized intermediary and grant certificate of registration as specified in Form I as set out in the Annexure and approve with or without modifications the regulations for the respective leveraged market contracts.

(5) The Commission may, while registering an applicant as an authorized intermediary, specify conditions for such registration to be complied by the authorized intermediary in such manner and time, as it may think fit.

4. Refusal to grant registration.—(1) No application for registration made under rule 3 shall be refused except after giving the applicant an opportunity of being heard.

(2) In case the Commission refuses to grant registration to an applicant, the decision shall be communicated to the applicant stating therein the reasons for such refusal.

5. Suspension or restriction of authorized intermediary.—(1) The Commission may by an order in writing impose any restrictions on an authorized intermediary or suspend its registration, if—

(a) the Commission, on reasonable grounds, believes that such action is in the interest of the capital market;

(b) the authorized intermediary fails to comply with the provisions of the Ordinance, these rules, any regulations or any directive or circular issued by the Commission or any condition of registration specified by the Commission;

(d) the authorized intermediary fails to make any amendments to the regulations as may be required by the Commission;

(e) the authorized intermediary fails or refuses to furnish the information required under any law to be furnished or required by the Commission or furnishes incorrect or incomplete information;

(f) the authorized intermediary fails or refuses to cooperate in any audit, enquiry, inspection or investigation ordered by the Commission; or

(g) the authorized intermediary refuses or fails to pay a penalty, if any, imposed by the Commission.

(2) The order of the Commission imposing any restriction or suspending the registration of the authorized intermediary shall state the period of restriction or suspension which shall not in the first instance exceed ninety days and such restriction or suspension may be extended by the Commission provided that the period of each such extension shall not exceed ninety days.

(3) The Commission while suspending the registration of an authorized intermediary may impose such conditions, as it deems proper, on the authorized intermediary.

(4) During the suspension the leveraged market contracts entered into before the suspension shall, subject to any directions issued by the Commission and regulations made by authorized intermediary, continue to remain valid and leveraged market participants shall fulfill their respective obligations under such leveraged market contracts accordingly.

6. Cancellation of registration of authorized intermediary.—(1) The Commission may cancel the registration of an authorized intermediary after providing it an opportunity of hearing, if—

(a) the cause of restriction or suspension of registration under Rule 5 continues for a period of not less than ninety days;

(b) the authorized intermediary refuses or fails to pay the penalty, if any, imposed by the Commission;

(d) a Court of competent jurisdiction has passed a winding up order of the authorized intermediary or a resolution has been passed or petition has been filed for voluntary winding-up of the authorized intermediary;

(e) the Commission, on reasonable grounds, believes that any other person referred to in sub-rule (2) of Rule 3 will perform the functions of the authorized intermediary in a better and effective manner;

(f) the authorized intermediary does not comply with the restrictions or conditions imposed by the Commission at the time of registration, restriction or suspension; or

(g) the authorized intermediary requests the Commission, on reasonable grounds, to cancel its registration.

(2) The Commission while cancelling the registration of an authorized intermediary may take such measures and issue such directions as it deems fit.

7. Conditions applicable to authorized intermediary.—An authorized intermediary shall—

(a) provide a platform to facilitate transactions of the respective leveraged market contracts;

(b) ensure that the requirements of these rules, the regulations and the requirements specified by the Commission and directions of the Commission are being complied with;

(c) ensure that a fair, transparent and efficient system for entering into and carrying out respective leveraged market contracts is provided in accordance with the regulations and all other applicable laws;

(d) make suitable amendments in the regulations from time to time with the approval of the Commission;

(e) correctly record all transactions relating to respective leveraged market contracts;

(f) submit to the Commission such periodic returns and other information as specified by the Commission;

(g) correctly disclose such information, as specified by the Commission, to the public relating to the respective leveraged market contracts;

(h) collect and maintain margins specified in the regulations;

(i) ensure that the total financing provided by a margin financier and/or trading financier at any point in time or total financing provided to a single fmancee or to clients of one broker or total financing provided in respect of any particular security, does not exceed the limits specified in the regulations;

(j) ensure that the total financing obtained by a single financee or all financees or in any particular security, at any point in time, does not exceed the limits specified in the regulations;

(k) ensure that total lending by a lender or borrowing by a borrower, at any point in time, of a particular security does not exceed the limits specified in the regulations;

(l) not provide false or misleading or incomplete information to the Commission;

(m) cooperate in any audit, enquiry, inspection or investigation ordered by the Commission; and

(n) comply with such other directions as may be issued by the Commission.

CHAPTER III
MARGIN FINANCING

8. Eligibility criteria for a margin financier.—A person shall be eligible to apply for registration as a margin financier, if—

(a) such person is —

(i) a broker;

(ii) a banking company as defined under the Banking Companies Ordinance, 1962 (LVII of 1962), with a minimum credit rating as specified in regulations;

(iii) a financial institution covered under Section 3A of the Banking Companies Ordinance, 1962 (LVII of 1962) with a minimum credit rating as specified in regulations;

(iv) an investment finance company licensed by the Commission to provide investment finance services with a minimum credit rating as specified in regulations; or

(v) such other corporate entity as may be recommended by the authorized intermediary and approved by the Commission;

(b) such person meets the minimum net capital and capital adequacy requirements specified in regulations;

(c) such person has adequate financial, technical, organizational and human resources for extension and maintenance of credit for the purpose of purchasing or carrying any security;

(d) such person is not in default of any regulatory requirement;

(e) such person has not been convicted of a fraud under any law, an offence under the laws administered by the Commission or any other offence involving moral turpitude and in case of a company none of its directors or significant shareholders, as the case may be, has been convicted of a fraud under any law, an offence under the laws administered by the Commission or any other offence involving moral turpitude;

(f) no investigation or enquiry has been concluded by the Commission with any adverse findings of mismanagement or misappropriation against such person or any of its directors or significant shareholders;

(g) no proceedings are pending with respect to its winding-up insolvency or any analogous relief;

(h) in case of a broker,—

(i) it has valid trading rights on a stock exchange and such rights are not suspended;

(ii) it is not in default of any payment obligations under the regulations of a stock exchange;

(iii) none of its significant shareholders, directors or chief executive officer by whatever name called have—

(i) remained a significant shareholder, director, chief executive officer, partner of a broker who has been expelled or declared a defaulter on account of default or any other reason under the stock exchange regulations; or

(ii) remained a broker who has been expelled or declared a defaulter on account of default or any other reason under the stock exchange regulations;

(i) such person is a participant or accountholder in central depository system and its status as a participant or accountholder is not suspended or terminated; such person is a clearing member of a clearing company and its status as a clearing member is not suspended or terminated; and

(k) such person meets such other requirements as may be specified by the Commission.

9. Registration of a margin financier.—(1) A person eligible for registration under Rule 8 may make an application to the authorized intermediary for registration which shall be accompanied by the following documents, namely:—

(a) documents showing that the requirements of clauses (a), (b), (c), (g), (h), (i) and (j) of Rule 8 have been fulfilled;

(b) in case the applicant is a company. Memorandum and Articles of Association;

(d) list of significant shareholders, in case the applicant is a company;

(e) an affidavit, in the manner specified in Form-II set out in the Annexure, that the applicant is not in violation of the requirements of Rule 8;

(f) in case the applicant is a company, a copy of the latest audited financial statements or in the case of an individual a copy of the income tax return as submitted to the Federal Board of Revenue;

(g) evidence of payment of application fee, charges, deposits and contributions as specified in the regulations; and

(h) any other document specified in the regulations.

(2) If the authorized intermediary is satisfied that the eligibility criteria under Rule 8 has been met with and the documents required under rule 9 have been submitted, the authorized intermediary may register the applicant as a margin financier.

(3) A margin financier shall not commence its business unless it has executed such agreements and assurances and furnished such documents as required by the authorized intermediary and specified in the regulations.

Explanation.—For the purpose of clause (b) of sub-rule (1) of rule 9 where the applicant is a corporate entity the deponent shall be its chief executive officer, the chief compliance officer, company secretary or equivalent and where the applicant is a natural person the deponent shall be the applicant himself.

10. Refusal to grant registration.—(1) No application for registration made under Rule 9 shall be refused except after giving the applicant an opportunity of being heard.

(2) In case the authorized intermediary refuses to grant registration to an applicant, the decision shall be communicated to the applicant stating therein the reasons for such refusal.

11. Restriction or suspension of a margin financier.—(1) The authorized intermediary may suspend or restrict with immediate effect a margin financier from providing margin financing and shall immediately notify to the Commission and market participants of such restriction or suspension, if such financier—

(a) is not in compliance with the eligibility conditions specified in Rule 8;

(b) fails or refuses to comply with any provision of these rules or any directions, orders or circulars issued by the Commission;

(d) is in breach of any obligation under an agreement or security furnished to the authorized intermediary or performance of any of the material obligations under any such agreement or security becomes unlawful or any such agreement or security is declared to be void or is repudiated or its validity or enforceability at any time is challenged by the margin financier or any party furnishing such security.

(2) Where the authorized intermediary neglects or fails to restrict or suspend a margin financier under sub-rule (1), the Commission may restrict or suspend the margin financier from providing margin financing.

12. Cancellation of registration of margin financier.—(1) The authorized intermediary may, after providing an opportunity of hearing to a margin financier, cancel its registration, if —

(a) it is not in compliance with the eligibility conditions specified in Rule 8;

(b) the cause of restriction or suspension under Rule 11 continues for more than forty-five days;

(c) the margin financier does not furnish the information required by the authorized intermediary or the Commission or furnishes incomplete or incorrect information;

(d) it fails or refuses to cooperate in any audit, enquiry, inspection or investigation ordered by the Commission;

(e) a Court of competent jurisdiction orders the winding-up or liquidation of the margin financier;

(f) any steps are taken for the winding-up of the margin financier by its shareholders or creditors; or

(g) a receiver, administrator or similar official is appointed in respect of the margin financier or a substantial part of its assets.

(2) Where upon occurrence of any of the events described in sub-rule (1), the authorized intermediary fails to cancel the registration of the authorized financier, the Commission may, after providing an opportunity of hearing to the margin financier, direct the authorized intermediary to cancel the registration of such margin financier and upon such direction the authorized intermediary shall immediately cancel the registration of such margin financier.

13. Conditions applicable to margin financiers.—A margin financier shall—

(a) only extend margin financing for purchases or carrying of securities in respect of trades carried out on a stock exchange;

(b) not extend margin financing without first executing a margin financing agreement with the financee which shall inter alia contain provisions prescribed in Form V as set out in the Annexure;

(d) ensure that true and complete information is passed on to the authorized intermediary; and

(e) ensure compliance with the provisions of the Anti-Money Laundering Act, 2010 (Act VII of 2010) and any rules and regulations made thereunder.

14. Additional conditions applicable to brokers who are margin financiers.—In addition to the provisions of Rule 13, a broker which is registered as a margin financier shall —

(a) provide margin financing by using its own funds or funds borrowed from financial institutions specified in sub-clauses (ii), (iii) and (iv) of clause (a) of Rule 8;

(b) not use the funds of any of its clients for providing margin financing to any other person or for proprietary account;

(d) not provide margin financing to any client without evaluating the creditworthiness of the client through a proper credit risk assessment methodology; and

(e) not provide margin financing to any person who is not its client.

15. Regulatory requirements for margin financing,—The authorized intermediary shall specify, in such manner as the Commission may direct, the following matters, namely:—

(a) the selection criteria, including the minimum liquidity requirements, for securities for which margin financing can be obtained;

(b) the maximum limits of margin financing which may be obtained by a broker for its proprietary position, by a single client through one or more brokers or by all the clients of a single broker or by a broker collectively for proprietary account and trading for client;

(c) the maximum limits of margin financing which may be obtained by a broker for its proprietary position, by a single client through one or more brokers or by all the clients of a single broker or by a broker collectively for proprietary account and trading for client, at any point of time, in a particular scrip;

(d) the percentage of the total value of securities financed under margin financing which shall be paid by the financee in cash as financee's minimum equity participation for the purchase of such securities;

(e) suspension or disciplining of margin financiers including grounds for taking such action;

(f) terms and conditions under which margin financing may be provided;

(g) recording and publishing of details of margin financing by the authorized intermediary;

(h) fees, charges, contributions and deposits payable in respect of margin financing;

(i) reporting details relating to margin financing from margin financier and such brokers who are financees or acting on behalf of such clients who are financees; and

(j) any other matter as deemed necessary for the effective implementation and enforcement of these rules.

CHAPTER IV
MARGIN TRADING

16. Eligibility criteria for trading financier.—A person shall be eligible to apply for registration as a trading financier, if---

(a) such person is—

(i) a broker;

(ii) a banking company as defined under the Banking Companies Ordinance, 1962 (LVII of 1962), with a minimum credit rating as specified in regulations;

(iii) a financial institution covered under Section 3-A of the Banking Companies Ordinance, 1962 (LVII of 1962) with a minimum credit rating as specified in regulations;

(iv) an investment finance company licensed by the Commission to provide investment finance services with a minimum credit rating as specified in regulations;

(v) a collective investment scheme as defined in the Non-banking Finance Companies and Notified Entities Regulations, 2008 and categorized as equity scheme or any scheme launched for the purpose of investment in margin trading provided its constituent documents allow such scheme to provide financing for margin trading;

(vi) such other corporate entity as may be recommended by the authorized intermediary and approved by the Commission;

(b) such person meets the minimum net capital and capital adequacy requirements specified in regulations;

(c) such person has adequate financial, technical, organizational and human resources for extension or maintenance of credit for the purpose of purchasing or carrying any security;

(d) such person is not in default of any regulatory requirement;

(e) such person has not been convicted of a fraud under any law, an offence under the laws administered by the Commission or any other offence involving moral turpitude and in case of a company or an asset management company, none of its directors and significant shareholders, as the case may be, has been convicted of a fraud under any law, an offence under the laws administered by the Commission or any other offence involving moral turpitude;

(f) no investigation or enquiry has been concluded against it by the Commission with any adverse findings of mismanagement or misappropriation and in case of a company or an asset management company (where applicant is a collective investment scheme) no such findings have been recorded against any of its directors or significant shareholders;

(g) no proceedings are pending with respect to its winding-up, insolvency or any analogous relief;

(h) in case of a broker, —

(i) it has valid trading rights on a stock exchange and such rights are not suspended;

(ii) it is not in default of any payment obligations under the regulations of a stock exchange;

(iii) none of its significant shareholders, directors or chief executive officer, by whatever name called, have—

(ii) remained a broker who has been expelled or declared a defaulter on account of default or any other reason under the stock exchange regulations;

(i) such person is a participant or accountholder in a central depository system and its status as a participant or accountholder is not suspended or terminated;

(j) such person is a clearing member of a clearing company and its status as a clearing member is not suspended or terminated; and

(k) such person meets with such other requirements as may be specified by the Commission.

17. Registration of a trading financier.--(1) A person eligible for registration under Rule 16 may make an application to the authorized intermediary for registration which shall be accompanied by the following documents, namely:—

(a) documents showing that the requirements of clauses (a), (b), (c), (g), (h), (i) and (j) of Rule 16, have been fulfilled;

(b) in case the applicant is a company, Memorandum and Articles of Association and in case of a collective investment scheme, its constituent documents;

(c) in case the applicant is a company, particulars of its chief executive officer and directors including their parentage, computerized national identity card numbers, residential addresses, directorships in other companies and significant shareholding in other companies and in case of a collective investment scheme, similar particulars of the chief executive officer and directors of the asset management company;

(d) list of significant shareholders, in case the applicant is a company;

(e) an affidavit, in the manner specified in Form-III as set out in the Annexure that the applicant is not in violation of the requirements of Rule 16;

(f) in case the applicant is a company, a copy of the latest audited financial statements or in the case of an individual a copy of the income tax return as filed with the Federal Board of Revenue:

(g) evidence of payment of application fee, charges, deposits and contributions as specified in the regulations; and

(h) any other document specified in or required by the regulations.

(2) If the authorized intermediary is satisfied that the eligibility criteria under Rule 16 has been satisfied and the documents required under Rule 17 have been submitted, the authorized intermediary may register the applicant as a trading financier.

(3) A trading financier shall not commence its business as a trading financier unless it has executed such agreements and assurances and furnished such documents as required by the authorized intermediary and specified in the regulations.

Explanation.—For the purpose of clause (b) of sub-rule (1) where the applicant is a corporate entity the deponent shall be the chief executive officer, the chief compliance officer, company secretary or equivalent of the applicant and where the applicant is a natural person the deponent shall be the applicant himself.

18. Refusal to grant registration.—(1) No application for registration made under Rule 17 shall be refused except after giving the applicant an opportunity of being heard.

(2) In case the authorized intermediary refuses to grant registration to an applicant, the decision shall be communicated to the applicant stating therein the reasons for such refusal.

19. Restriction or suspension of a trading financier.—(1) The authorized intermediary may immediately restrict a trading financier from providing financing for margin trading and shall immediately notify to the Commission and market participants of such restriction or suspension, if such trading financier—

(a) after registration is not in compliance with the eligibility conditions specified in Rule 16;

(b) fails or refuses to comply with any provision of these rules or any directions, orders or circulars issued by the Commission;

(d) is in breach of any obligation under an agreement or security furnished to the authorized intermediary or performance of any of the material obligations under any such agreement or security becomes unlawful or any such agreement or security is declared to be void or is repudiated or its validity or enforceability at any time is challenged by the trading financier or any party furnishing such security.

(2) Where the authorized intermediary neglects or fails to restrict or suspend a trading financier under sub-rule (1), the Commission may restrict or suspend such trading financier.

20. Cancellation of registration of a trading financier.—(1) The authorized intermediary may, after providing an opportunity of hearing to a trading financier, cancel the registration of such trading financier and shall immediately notify to the Commission of such cancellation, if—

(a) the cause of restriction or suspension under Rule 19 continues for more than forty five days;

(b) the trading financier fails or refuses to furnish the information required by the authorized intermediary or Commission, or furnishes incomplete or incorrect information;

(d) a Court of competent jurisdiction orders winding up or liquidation of the trading financier;

(e) any step has been taken to seek voluntary winding-up of the trading financier by its shareholders or creditors; or

(f) a receiver, administrator or similar official is appointed in respect of the trading financier or a substantial part of its assets.

(2) Upon occurrence of any of the events described in sub-rule (1), the Commission may, after providing an opportunity of hearing to a trading financier, direct the authorized intermediary to cancel the registration of such trading financier and upon such direction the authorized intermediary shall immediately cancel the registration of such trading financier.

21. Conditions applicable to trading financiers.—A trading financier shall--

(a) only extend financing to finance purchases or carrying securities in respect of trades carried out on a stock exchange;

(b) at all times comply with the regulations and all directives or circulars as may be issued by the Commission;

(d) ensure compliance with the provisions of the Anti-Money Laundering Act, 2010 (Act VII of 2010) and any rules and regulations made thereunder.

22. Additional conditions applicable to brokers who are trading financiers.—(1) In addition to the provisions of Rule 21, a broker who is registered as a trading financier shall—

(a) provide financing under margin trading by using his own funds or funds borrowed from financial institutions specified in sub-clauses (ii), (iii) and (iv) of clause (a) of Rule 16 or subject to sub-rule (2) use the funds of his corporate clients, provided the broker has entered in to an agreement with such corporate clients, which shall contain inter alia the provisions prescribed in Form VI as set out in the Annexure;

(b) not use the funds of any client, except as provided in clause (a), for providing financing under margin trading to any other person or for proprietary account; and

(2) The Commission may, where it deems necessary in the interest of the market,—

(a) lay down eligibility criteria for corporate clients which may provide funds to brokers for providing finance under margin trading.

(b) restrict or prohibit the use of funds of corporate clients by brokers generally or otherwise.

23. Regulatory requirements for Margin Trading.—(1) The authorized intermediary shall specify, in such manner as the Commission may direct, the following matters, namely:—

(a) the selection criteria, including the minimum liquidity requirements, for securities for which financing can be obtained by margin trading;

(b) risk management systems, including but not limited to collateral and margin requirements, exposure margins, position limits, collection of mark to market losses, deposits provided that all margins, deposits and mark to mark losses shall be payable in cash only;

(c) the maximum limits of financing which may be obtained by a broker for its proprietary position, by a single client of a broker or by all the clients of a single broker, or by the broker collectively for proprietary account and trading for client;

(d) the maximum limits of financing which may be obtained by a broker for its proprietary position, by a single client of a broker or by all the clients of a single broker, or by the broker collectively for proprietary account and trading for client, at any point of time in a particular scrip;

(e) the percentage of the total value of securities financed in margin trading which shall be paid by the financee only in cash as financee's minimum equity participation for the purchase of such securities provided that such percentage shall not be less twenty-five per cent and provided that such equity participation shall be paid by the financee from his own sources and not through any form of financing or credit from the broker;

(f) suspension or disciplining of a trading financier including grounds for taking such action;

(g) terms and conditions under which margin trading may be undertaken;

(h) the contract period provided that such contract period shall not exceed sixty days;

(i) recording and publishing of details of margin trading by the authorized intermediary;

(j) fee, charges, contributions and deposits payable in respect of margin trading;

(k) reporting details relating to margin trading from a trading financier and such brokers who are financees or acting on behalf of such clients who are financees; and

(l) any other matter as deemed necessary for the effective enforcement of these rules.

(2) The funds provided by a corporate client of a broker for margin trading as provided in clause (a) of Rule 22 shall be from its surplus funds and provided with the approval of its board of directors.

CHAPTER V
SECURITIES LENDING AND BORROWING

24. Eligibility criteria for securities lender and borrower.—A person shall be eligible to apply for registration as a securities lender and borrower, if—

(a) such person is—

(i) a broker;

(ii) a banking company defined under the Banking Companies Ordinance, 1962 (LVII of 1962), with a minimum credit rating as specified in regulations;

(iii) a financial institution covered under Section 3A of the Banking Companies Ordinance, 1962 (LVII of 1962) with a minimum credit rating as specified in regulations;

(iv) an investment finance company licensed by the Commission to provide investment finance services with a minimum credit rating as specified in regulations; or

(v) such other person as may be recommended by the authorized intermediary and approved by the Commission.,

(b) such person meets the minimum net capital and capital adequacy requirements specified in regulations;

(c) such person has adequate financial, technical, organizational and human resources to undertake the transaction of securities borrowing and lending;

(d) such person is not in default of any regulatory requirement;

(e) such person has not been convicted of a fraud under any law, an offence under the laws administered by the Commission or any other offence involving moral turpitude and in case of firms and companies none of their partners, directors and significant shareholders, as the case may be, has been convicted of a fraud under any law, offence under the laws administered by the Commission or any other offence involving moral turpitude;

(f) no investigation or enquiry has been concluded by the Commission with any adverse findings of mismanagement or misappropriation against such person or any of their directors, significant shareholders or partners, as the case may be;

(g) no proceedings are pending with respect to its winding-up or insolvency or an analogous relief;

(h) in case of a broker,—

(i) it has valid trading rights on a stock exchange and such trading rights are not suspended;

(ii) it is not in default of any payment obligations under the regulations of a stock exchange;

(iii) none of its significant shareholders, directors or chief executive officer, by whatever name called, have—

(i) remained a significant shareholder, director, chief executive officer, partner of a broker who has been expelled or declared a defaulter on account of default or for any other reason under the stock exchange regulations; or

(ii) remained a broker who has been expelled or declared a defaulter on account of default or for any other reason under the stock exchange regulations;

(i) such person is a participant or accountholder in a central depository system and its status as a participant or accountholder is not suspended;

(j) such person is a clearing member of a clearing company and its status as a clearing member is not suspended or terminated; and

(k) such person meets such other requirements as may be specified by the Commission.

25. Registration of a securities lender and borrower.—(1) A person eligible for registration under Rule 24 may make an application to the authorized intermediary for registration which shall be accompanied by the following documents, namely: —

(a) documents showing that the requirements of clauses (a), (b), (c), (g), (h) (i) and (j) of Rule 24 have been fulfilled;

(b) in case the applicant is a company, Memorandum and Articles of Association;

(d) list of significant shareholders, in case the applicant is a company;

(e) an affidavit, in the manner specified in Form-IV as set out in the Annexure, that the applicant is not in violation of the requirements of clauses (d), (e) and (f) of Rule 24;

(f) in the case of a company, a copy of the latest audited financial statements or in the case of an individual a copy of the income tax return as filed with the Federal Board of Revenue;

(g) evidence of payment of application fee, charges, deposits and contribution as specified in the regulations; and

(h) any other document specified in or required by the regulation.

(2) If the authorized intermediary is satisfied that, the eligibility criteria under Rule 24 has been satisfied and the documents required under Rule 25(1) have been submitted, the authorized intermediary may register the applicant as a securities lender and borrower.

(3) A securities lender or borrower shall not commence its business as a securities lender or borrower, as the case may be, unless he has executed such agreements and assurances and furnished such documents as required by the authorized intermediary and specified in the regulations.

Explanation.—For the purpose of clause (b) of sub-rule (1) where the applicant is a corporate entity, the deponent shall be its chief executive officer, chief compliance officer, company secretary or equivalent and where the applicant is a natural person, the deponent shall be the applicant himself.

26. Refusal to grant registration.—(1) No application for registration made under Rule 25 shall be refused except after giving the applicant an opportunity of being heard.

(2) In case the authorized intermediary refuses to grant registration to an applicant, the decision shall be communicated to the applicant stating therein the reasons for such refusal.

27. Restriction or suspension of a securities lender and borrower.—(1) The authorized intermediary may immediately restrict or suspend a securities lender and borrower from securities lending and borrowing and shall immediately notify to the Commission and the market participants its of such restriction or suspension, if the securities lender and borrower--

(a) after registration is not in compliance with the eligibility conditions specified in Rule 24; or

(b) fails or refuses to comply with any provision of these rules or any directions, orders or circulars issued by the Commission from time to time;

(d) is in breach of any obligation under an agreement or security furnished to the authorized intermediary or performance of any of the material obligations under any such agreement or security becomes unlawful or any such agreement or security is declared to be void or is repudiated or its validity or enforceability at any time is challenged by the securities lender and borrower or any party furnishing such security; or

(e) is in a situation where a receiver, administrator or similar official is appointed in respect of the trading financier or a substantial part of its assets.

(2) Where the authorized intermediary neglects or fails to restrict or suspend a securities lender and borrower under sub-rule (1) of Rule 27, the Commission may restrict or suspend the securities lender and borrower.

28. Cancellation of registration of a securities lender and borrower.—(1) The authorized intermediary may, after providing an opportunity of hearing to the securities lender and borrower, cancel its registration and shall immediately notify to the Commission of such cancellation, if—

(a) it is not in compliance with the eligibility conditions specified in Rule 24;

(b) the cause of restriction under Rule 27 continues for more than forty-five days;

(c) it does not furnish the information required by the authorized intermediary or Commission, or furnishes incomplete or incorrect information;

(d) it refuses or fails to cooperate in any audit, enquiry, inspection or investigation ordered by the Commission;

(e) a Court of competent jurisdiction orders winding up or liquidation of the securities lender and borrower; or

(f) any step has been taken to seek voluntary winding-up of the securities lender and borrower by its shareholders or creditors.

(2) Upon occurrence of any of the events described in sub-rule (1), the Commission may, after providing an opportunity of hearing to a securities lender and borrower, direct the authorized intermediary to cancel the registration of such securities lender and borrower and upon such direction the authorized intermediary shall immediately cancel the registration of such securities lender and borrower.

29. Conditions applicable to securities lender and borrower.—(1) A securities lender and borrower shall—

(a) only lend or borrow securities through the platform provided by the authorized intermediary;

(b) not lend or borrow securities for his own benefit or on behalf of a client, whether directly or indirectly, of any company where such lender and borrower or the client is—

(i) a director or sponsor;

(ii) an associated company and associated undertaking;

(iii) a shareholder who is barred from selling such securities; or

(iv) any other person as may be specified by the Commission;

(c) be eligible to lend or borrow any security or arrange for lending or borrowing of any security for his own benefit or on behalf of its clients;

(d) at all times comply with the regulations and all directives or circulars as may be issued by the Commission;

(e) ensure that true and complete information is passed on to the authorized intermediary; and

(f) ensure compliance with the provisions of the Anti-Money Laundering Act, 2010 (Act VII of 2010) and any rules and regulations made thereunder.

(2) All securities lending and borrowing contracts shall stand released on the last working day before the start of a spot period relating to that security and lenders and borrowers shall not lend or borrow securities during the spot period.

30. Regulatory requirements for securities lending and borrowing.—The authorized intermediary shall specify, in such manner as the Commission may direct, the following matters, namely:—

(a) risk management systems, including but not limited to collateral and margin requirements, exposure margins, position limits, collection of mark to market losses, forms of deposits, etc. ;

(b) the manner in which the authorized intermediary shall put in place a system whereby the—

(i) lender agrees to lend a specified number and class of securities to the borrower at an agreed rate of return, through a platform provided by the authorized intermediary; and

(ii) borrower agrees to borrow a specified number and class of securities at an agreed rate or return and to return the same to the lender, together with the agreed return, through a platform provided by the authorized intermediary.

(c) selection criteria, including minimum liquidity requirements, for securities which shall be available for lending and borrowing;

(d) the manner in which the margins including marked-to-market losses shall be deposited by the lender and borrower;

(e) suspension or discipline of securities lending and borrower including grounds for taking such actions;

(f) terms and conditions under which securities lending and borrowing may be undertaken;

(g) recording and publishing of details of securities lending and borrowing by the authorized intermediary;

(h) fee, charges, contributions and deposits payable for facilities and services provided for securities lending and borrowing; and

(i) any other matter as deemed necessary for the effective enforcement of these rules.

CHAPTER VI
PLEDGING

31. Conditions applicable for pledge of securities.—No broker shall pledge or deposit any security on account of a client as collateral except as provided below, namely:—

(a) the pledge or deposit is in favour of or with a stock exchange or a clearing company in respect of margin requirements relating to the transactions or trades of such client as required under the relevant regulatory framework;

(b) the pledge or deposit is in favour of or with a financial institution in respect of margin financing extended by such financial institutions in respect of transactions of such clients under the margin financing facility or any other form of financing as allowed by the Commission;

(c) the pledge or deposit is in favour of or with a financial institution to borrow funds, provided that the client has authorized the broker in the manner specified by the Commission; and

(d) the pledge or deposit is for any other purpose as permitted under applicable laws and regulations, provided the client has authorized the broker in the manner specified by the Commission.

CHAPTER VII
MISCELLANEOUS

32. Power of the Commission to issue directives, circulars, etc.—The Commission may issue such directives and circulars, as are necessary to carry out the purposes of these rules.

33. Broker's obligations.—(1) In addition to the brokers' obligations under the Brokers and Agents Registration Rules, 2001, a broker acting on behalf of its clients in any of the leveraged markets or pledging the securities of a client shall ensure that—

(a) no transaction is executed by the broker on behalf of a client unless an appropriate agreement has been executed between the broker and such client;

(b) all provisions of the Anti-Money Laundering Act, 2010 (Act VII of 2010) and any rules and regulations made thereunder are complied with at all times;

(c) all risks involved in the relevant transactions have been fully disclosed and the broker has obtained a written confirmation from its clients that they have understood and have the ability to bear the risks in such transactions; and

(d) the options available to a client in respect of various financing facilities in the securities markets have been fully disclosed and explained to the clients.

(2) The broker shall evaluate the credit worthiness of its clients through a proper credit risk assessment methodology and assign credit limits to each client beyond which the client shall not be allowed to avail financing under margin financing and margin trading.

(3) A broker shall maintain records in respect of its compliance with the aforesaid obligations and such records shall be open to inspection by the Commission at any time.

34. Prohibition.—No person shall carry on any activity, or purport to do so, which is covered under these rules or under Section 16 of the Ordinance except in accordance with and to the extent permitted by the provisions of these rules, regulations or any directives or circulars issued by the Commission.

35. Fee.—The Commission may from time to time specify such fee as may be required under these rules.

36. Penalty.—A person who contravenes or fails to comply with any provision of these rules regulations or any directives or circulars issued under the Ordinance by the Commission, shall, in addition to any action authorized under these rules, be liable to any and all actions authorized by the Ordinance for such contravention or failure.

37. Repeal.—The Margin Trading Rules, 2004 are hereby repealed.

Annexure

[see Rule 2(1 )(a)]

FORM I

[See Rule 3(4)]

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN

CERTIFICATE OF REGISTRATION AUTHORIZED INTERMEDIARY

In exercise of the powers conferred by rule 3 of Securities (Leveraged Markets and Pledging) Rules, 2011 the Securities and Exchange Commission of Pakistan hereby grants a certificate of registration to _____________________________, as an Authorized Intermediary subject to the conditions prescribed under the Securities (Leveraged Markets and Pledging) Rules, 2011 or as may be specified or imposed hereafter by the Commission.

The registration number of the authorized intermediary is _____________

Dated _________________

Place: ISLAMABAD

By order

Sd/-
For and on behalf of

THE SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN

FORM II

[See Rule 9 (1) (e)]

AFFIDAVIT

Affidavit of _________________ daughter/son/wife of ____________ resident of __________________________ and holding CNIC/Passport No. _________________________

I the above named deponent, do hereby state on oath/solemnly affirm as under:—

1. [1]That I am the ______________ of ____________, and I am well conversant with the facts deposed below.

2. [2] _____________ is not in default of any regulatory requirement.

3. [3] ____________has not been convicted of any fraud under any law, any offence under the laws administered by the Commission or any other offence involving moral turpitude. [4][None of the partners, directors and significant shareholders of _______________, as the case may be, has been convicted of a fraud under any law, an offence under the laws administered by the Commission or any other offence involving moral turpitude.

4. No adverse findings of mismanagement or misappropriation have been given against ____________ [5][or any of its partners, directors or significant shareholders] in any inquiry or investigation ordered by the Commission.

5. [6] ______________ is not undergoing any proceedings with respect to insolvency nor any such proceedings are threatened.

6. The statements made and the information given along with the application under Rule 8 of the Securities (Leveraged Markets and Pledging) Rules, 2011 is correct and that there are no facts which have been concealed.

7. That I have no objection if the Securities and Exchange Commission of Pakistan requests or obtains information about me from any third party.

8. That all the documents provided to Securities Exchange Commission of Pakistan are true and complete copies of the originals.

DEPONENT

The Deponent is identified by me

Signature _____________

ADVOCATE

(Name)

Solemnly affirmed before me on this _______ day of ____ at ______ by the Deponent above named who is identified to me by _________, Advocate.

Signature ________________

OATH COMMISSIONER FOR TAKING AFFIDAVIT

(Name and Seal)

FORM III

[See Rule 17(l)(e)]

AFFIDAVIT

Affidavit of ___________ daughter/son/wife of _______________ resident of ________________________________________and holding CNIC/Passport No. ____________________

I the above named deponent, do hereby state on oath/solemnly affirm as under:—

1. [7]That I am the ___________ of ___________, and I am well conversant with the facts deposed below.

2. [8] __________ is not in default of any regulatory requirement.

3. [9] ___________ has not been convicted of a fraud under any law, any offence under the laws administered by the Commission or any other offence involving moral turpitude. [10][None of the partners, directors and significant shareholders of _____________ as the case may be, has been convicted of a fraud under any law, an offence under the laws administered by the Commission or any other offence involving moral turpitude.

4. No adverse findings of mismanagement or misappropriation have been given against ____________ [11] “[or any of its partners, directors or significant shareholders] in any inquiry or investigation ordered by the Commission.

5. [12] ____________ is not undergoing any proceedings with respect to insolvency nor any such proceedings are threatened.

7. That I have no objection if [13] __________________ requests or obtains information about me from any third party.

8. That all the documents provided to [14] ______________ are true and complete copies of the originals.

DEPONENT

The Deponent is identified by me

Signature _______________

ADVOCATE

(Name)

Solemnly affirmed before me on this _______ day of _______ at _______ by the Deponent above named who is identified to me by ________, Advocate.

Signature __________________

OATH COMMISSIONER FOR TAKING AFFIDAVIT

(Name and Seal)

FORM IV

[See Rule 25 (1) (e)]

AFFIDAVIT

Affidavit of _________________ daughter/son/wife of ____________ resident of __________________________ and holding CNIC/Passport No. _________________________

1. [15]That I am the ______________ of ____________, and I am well conversant with the facts deposed below.

2. [16] _____________ is not in default of any regulatory requirement.

3. [17] ____________has not been convicted of any fraud offence under the laws administered by the Commission or any other offence involving moral turpitude. [18][None of the partners, directors and significant shareholders of _______________, as the case may be, has been convicted of any fraud offence under the laws administered by the Commission or any other offence involving moral turpitude.

4. No adverse findings of mismanagement or misappropriation have been given against ____________ [19][or any of its partners, directors or significant shareholders] in any inquiry or investigation ordered by the Commission.

5. [20] ______________ is not undergoing any proceedings with respect to insolvency nor any such proceedings are threatened.

7. That I have no objection if [21] _____________ requests or obtains information about me from any third party.

8. That all the documents provided to [22] ________________ are true and complete copies of the originals.

DEPONENT

The Deponent is identified by me

Signature _____________

ADVOCATE

(Name)

Solemnly affirmed before me on this _______ day of ____ at ______ by the Deponent above named who is identified to me by _________, Advocate.

Signature ________________

OATH COMMISSIONER FOR TAKING AFFIDAVIT

(Name and Seal)

FORM V

[See Rule 13]

The margin financing agreement shall, inter alia, specify the following, namely:—

(a) Name of the margin financier and financee;

(b) Date and term of the agreement;

(d) Markup or profit rate applicable for margin financing;

(e) Acceptable form of collateral to be deposited by the financee;

(f) Terms of agreement with provisions for renewal;

(g) Securities for which margin financing shall be provided;

(h) Conditions under which agreement may be altered, terminated and implications thereof;

(i) Default management procedures that shall apply in the ever of default by a margin financier or financee in completing their respective obligations as per rules; and

(j) Signature(s) of the authorized persons of margin financiers and financee.

FORM VI

[See Rule 22(1) (a)]

The agreement between a broker and its client for use of client's funds for providing financing for margin trading shall, inter alia, specify the following, namely:—

(a) Names and particulars of the parties;

(b) Date and term of the agreement;

(d) Representation by the client that the funds being provided for margin trading are its own funds and not obtained or borrowed from any other person.

(d) Terms and conditions for markup or profit rates to be charged;

(e) Applicable fee and charges;

(e) Rights and obligation of both parties;

(f) Terms of agreement with provisions for renewal;

(g) Securities for which financing shall be provided in margin trading;

(h) Conditions under which agreement may be altered, terminated and implications thereof;

(i) Adequate disclosures of risks

(j) Default management procedures that shall apply in the event of default in completing their respective obligations as per the Rules and authorized intermediary's regulations approved by the Commission; and

(k) Signature(s) of the authorized representative of the parties.

----------------------

ACT NO. III OF 2011

THE GILGIT-BALTISTAN PURE FOOD ACT, 2011

An Act to regulate provision of pure food in Gilgit-Baltistan.

[Gazette of Pakistan, Extraordinary, Part-I, 23^rd May, 2011]

No. Secy-Law (Legis)-l/2008, dated 5.4.2011.—WHEREAS it is expedient to regulate by law the preparation and sale of Pure Food in the Gilgit-Baltistan.

It is hereby enacted as follows:—

CHAPTER-I
PRELIMINARY

1. Short title, extent and commencement.—

(i) This Act shall be called the Gilgit-Baltistan Pure Food Act, 2011.

(ii) It shall extend to the whole of Gilgit-Baltistan.

(iii) It shall come into force at once.

2. Definition.—In this Act unless the context otherwise requires, the following expressions shall have the meanings hereby respectively assigned to them, that is to say,—

(1) "Adulterated food" means an article of food—

(i) which is not of the nature, substance or quality which purports or is represented to be; or

(ii) which contains any such extraneous substance as may affect adversely the nature, substance or quality thereof, or

(iii) which is processed, mixed, coloured, powdered or created with any other substance in contravention of the rules; or

(iv) any constituent of which has been wholly or in part abstracted so as to affect injuriously its nature, substance or quality; or

(v) which contains any poisonous ingredient which may render it injurious to health; or

(vi) the quality or purity of which does not conform to the prescribed standards; or

(vii) which having been prepared, packed or kept under in-sanitary conditions, have been contaminated or become injurious to health.

2. "Banaspati" means such article of food resembling ghee as it is prepared by hydrogenation of edible vegetable oil and contains no milk or animal fat;

3. "Charbi" means an article of food which resembles ghee or banaspati, but contains animal fat other than milk fat;

4. "Chemical Examiner" means—

(i) The Chemical Examiner to Government; and

(ii) Any other officer appointed by government to be Chemical Examiner for the purpose of this Act;

(6) "Cream" means the portion of the milk of cow or buffalo which is rich in fat and rises to the surface of milk on standing, or which has been separated by skimming or otherwise;

(7) "Dahi" means the product obtained by lactice acid fermentation of milk;

(8) "Director" means the Director Health Services, of Gilgit-Baltistan;

(9) "Food" means any article used as food or drink for human consumption other than drugs, and includes.—

(i) any substance which is intended for use in the composition or preparation of food;

(ii) any flavoring matter or condiment;

(iii) any colouring matter intended for use in food;

(iv) chewing gum and other products of the like nature; and

(v) water in any form, including ice, intended for human consumption or for use in the composition or preparation of food.

Explanation-I.—An article shall not cease to be food by reason only that it is also capable of being used as medicine.

Explanation-II.—Iodized salt shall for the purpose of this Act be considered as food either consumed one or as an ingredient in other foods.

(10) "Ghee" means ghee prepared exclusively from butter;

(11) "Government" means the Gilgit-Baltistan Government.

(12) "Godown" means a place where articles of food are received or stored for sale or delivery to a customer or consignee;

(13) "Health Officer" means the District Health Officer or the Assistant District Health Officer, and includes a Medical Officer of Health, an Assistant Medical Officer of Health of a Local Authority, and any other person appointed by government to be Health Officer for the purpose of this Act;

(14) "Inspector" means an Inspector appointed under this Act;

(15) Iodized salt means edible common salt (namak) to which potassium iodine has been added, for the purpose of fortifying or enriching it as a means of preventing lodging deficiency and disorder, in the manner and quantity as may be prescribed.

(16) "Local Authority" means.—

(i) a Municipal Committee or Town Committee constituted under the Gilgit-Baltistan Local Government Order, 1979;

(ii) a Local Council constituted under the Gilgit-Baltistan Local Government Order, 1979;

(iii) an authority declared by Government, by notification in the official Gazette, to be a Local Authority for the purpose of this Act;

(17) "Margarine" means any food, whether mixed with butter or not, which resembles butter and is not milk-blended butter;

(18) "Milk" means the normal, clean and pure secretion obtained from the udder of a healthy cow, buffalo, goat or sheep, whether boiled, pasteurized, homogenized or sterilized, and includes standardized and toned milk;

(19) "Misbranded food" means an article of food.—

(i) which is an imitation of or substitute for or resembles, in a manner likely to deceive, another article of food and is sold or is intended to be sold under the name, under which such other article is sold, or is not correctly labeled to indicate its true character; or

(ii) which is so coloured, flavoured, coated, powdered or published as to conceal the true nature thereof; or

(iii) which is contained in any package or label or which bears any statement, design or device regarding the ingredients or the substance contained therein, which is false or misleading in any material particular, or if the package is otherwise deceptive with respect to its contents; or

(iv) which is not properly packed and labelled in accordance with the rules.

(20) "Occupier" means the person who has control of the affairs of a factory, shop or godown and includes the manager or managing agent or any other person authorized to represent the occupier;

(21) "Package" includes every article in which goods for carriage or for sale are cased, covered, enclosed, contained or packed;

(22) "Pre-packed" means packed or made up in advance ready for retail sale in a wrapper or container;

(23) "Prescribed" means prescribed by rules;

(24) "Public Analyst" means Public Analyst appointed under this Act;

(25) "Retail sale" means any sale to a person buying otherwise than for the purpose of re-sale;

(26) "Rules" means rules made under this Act;

(27) "Sale" in relation to food, means a transfer of ownership either by way of barter or in exchange for a price paid or promised or part paid and

(28) "Standardized milk" means milk which has been reduced to the prescribed level of milk fat by removal of fat;

(29) "Toned milk" means milk which has been standardized to the prescribed level of milk fat and solids by addition or reconstituted milk solids;

(30) "Transit" includes all stages of transportation from the place of manufacture or other source of origin to the consumer; and

(32) "Wholesale" means any sale other than retail sale.

CHAPTER-II

GENERAL PROVISIONS

3. False warranty.—No person shall in respect of any food sold by him or given by him for sale to an agent to give to the purchaser or his agent a false warranty in writing.

4. Prohibition of mixing and selling mixed food.—(1) No person shall mix, colour, stain or powder or direct or permit any other person to mix, colour, stain, or powder any food with any matter or ingredient—

(a) In contravention of the prescribed rules; or

(b) so as to render the food injurious to health with intent that the same may be sold in that state.

(2) No person shall sell, offer, keep or store any goods so mixed, coloured, stained or powdered.

5. Prohibition of sale, preparation, manufacture, import or export of unwholesome food intended for human consumption.—No person shall, directly or indirectly, himself or by any other person,—

Prepare, manufacture, keep or store for sale, or sell or offer to sell, any food which is unsound, unwholesome, injurious to health or unfit for human consumption; or

Import or export any food in such manner or in such condition as renders it or is likely to render it injurious to health.

6. Prohibition of sale or manufacture for sale of food which is adulterated or misbranded or not of the nature, substance or quality demanded.—(1) No person shall, directly, or indirectly himself or by any other person, prepare, manufacture, keep or store for sale, or sell, or offer to sell any food.—

(a) which is adulterated;

(b) which is misbranded;

(d) for the sale of which a license is required otherwise than in accordance with the condition of the license;

(e) in contravention of any other provision of this Act or the rules.

(2) No person shall directly or indirectly, himself or by any other person, manufacture, sell, offer to sell, keep or store for sale any goods notified in this behalf by Government, unless it is coloured in the manner prescribed.

(3) Government may, by notification in the official Gazette, prohibit or regulate the keeping, in any factory or wholesale business premises in which such articles of food as are specified in the notification are manufactured or stored or any substances likely to be used as adulterants as so specified.

7. Sale of pre-packed food.—No person shall keep or store for sale or offer to sell, any pre-packed food unless he has complied with the rules made in this behalf.

8. Prohibition of sale of food without complying with rules.—No person shall import, export, prepare, manufacture, keep or store for sale or sell any food unless the rules providing for the mode of its manufacture, processing or preparation, packing, labelling, consignment, delivery standard of quality or bill of containers have been complied with.

9. Sale of margarine, banaspati and charbi.—(1) Banaspati, charbi and margarine unless every package containing any such substance is durably marked or labelled in such manner as may be prescribed.

(2) No person shall sell, whether wholesale or retail, or transport by way of trade any banaspati, charbi or margarine unless every package containing any such substance is durably marked or labelled in such manner as may be prescribed.

10. Banaspati, margarine or 'charbi' not to be sold loose.—(1) No person shall sell banaspati, margarine charbi loose or from an open package—

Provided that banaspati may be so sold under a license and subject to such conditions as may be prescribed in this behalf.

11. License for manufacture, storage and sale of goods.—(1) No place shall be used.—

(a) for the preparation, or the manufacturing, processing, blending, preserving, refrigerating, canning or bottling of any food;

(b) for the business of a wholesale dealer in banaspati, charbi, ghee, margarine, fish oil, mustard oil, cottonseed oil or other edible oils and such food as may be prescribed;

(d) as a hotel, restaurant or eating house;

Except under a license to be granted in such manner and by such authority as may be prescribed:

Provided that Government may exempt any specified premises or class of premises from the operation of this section.

(2) The license required under this section may be renewed annually on payment of prescribed fees.

(3) The renewal of a license may be refused, or a license may be cancelled by the authority granting the license, if.—

(i) the licensee fails to maintain the register referred to in Section 12, or is convicted of an offence under this Act; or

(ii) the premises is not maintained in such condition as may be prescribed.

(4) No person shall keep or store for sale or sell or offer to sell any food for human consumption unless he is in possession of such identification permit as may be prescribed.

12. Register for manufacture and wholesale business.— Every occupier of a place used for the preparation or manufacture for the purposes of trade of any such article of food as Government may, by notification in the official Gazette, specify in this behalf and every wholesale dealer or his agent who stores any such article, shall keep and maintain a register in such form as may be prescribed, and such register shall be open to inspection, by the Inspector.

13. Food poisoning.—(1) If a Health Officer or an Inspector has reason to suspect that any food or any vessel or utensil with which food may come in contact is likely to cause food poisoning (acute, chronic or cumulative) by chemical or bacteriological agents, he may take sample of such food or the vessel or the utensil for analysis under this Act, and if he takes a sample, give notice to the person-in charge of the food that, until the result of the analysis is known, the food or any specified portion thereof shall not be used and shall be kept or removed in the manner specified in the notice.

(2) If a Health Officer has reason to suspect that tuberculosis is likely to be caused by consumption of milk supplied from any dairy or other source, he may, by notice to the person-in charge of such dairy or source, prohibit the supply of milk from such dairy or source.

(3) If a person is, in the opinion of the Local Authority, suffering from any communicable disease, the Local Authority may, by notice to such person, prohibit him from preparing manufacturing, selling or offering to sell any article of food for human consumption.

(4) A Health Officer may, by notice to any person handling articles of food in any hotel, restaurant, sweetmeat shop, or any other public eating place, require him to obtain and keep in his possession a health certificate from a Health Officer to the effect that he is free from communicable disease, and to get it renewed from year to year, till such time as he continues so to handle such articles.

(5) Every person to whom a notice under this section has been given shall comply with such notice.

(6) Whether practicable, the Health Officer shall instruct the owner of the dairy or other source from which milk is supplied to carry out such remedial measures as considered necessary by him, and if these are complied with to his satisfaction the notice issued under sub-section (2) shall be withdrawn.

Explanation.—Persons debarred under sub-section (3) shall have to produce a certificate as laid down in sub-section (4).

CHAPTER -III
ANALYSIS OF FOOD

14. Appointment of Public Analyst.—Government may, by notification appoint Public Analysts for the purposes of this Act, for the whole or any part of the Gilgit-Baltistan for any specified food or generally for all foods.

15. Local Authorities to enforce the Act.—It shall be the function of every Local Authority to carry into execution and enforce the provisions of this Act within its jurisdiction with a view that all articles of food and drink are sold in a pure and genuine state.

16. Appointment of Inspectors.—(l) Government may appoint Inspectors in respect of all or any specified food, and an Inspector so appointed shall have jurisdiction in such areas as Government may direct :

Provided that Health Officer of Local Authority and such other holders of offices and posts in or under Local Authorities (Including Local Councils) and such officers in the service of Government, as Government may by Notification in the Official Gazette specify in this behalf shall be ex-officio Inspectors in respect of all food within the areas under their respective jurisdiction.

(2) Subject to any rules made in this behalf, a Local Authority shall appoint Inspectors in respect of all or any specified food, and an Inspector so appointed, shall unless the Local Authority otherwise directs, exercise the powers and perform the functions of an Inspector under this Act throughout the area over which such Local Authority has jurisdiction.

(3) The Director Food may exercise the powers and perform the function of an Inspector under this Act, and any Assistant Director or any other officer working under the Director may exercise such powers and perform such functions of an Inspector within such areas as the Director may, by order in writing, direct.

(4) The Health Officer and Sanitary Inspectors of Local Authorities and such other holders of offices and posts in or under a Local Authority and such officers in the service of Government as Government may, by notification in the official Gazette, specify in this behalf, shall be ex-officio Inspector in respect of all foods within the limits of their respective jurisdiction.

17. General Powers of Inspectors.—(1) An Inspector may detain and search any vehicle or package of any food intended for sale or in the course of delivery if he has reason to suspect that the food therein carried or contained may be injurious to health, unwholesome or unfit for human consumption or not of the same nature, substance or quality which it purports to be.

(2) An Inspector may:

(i) enter into and inspect any market, godown, shop, stall or other place used for sale of any food intended for human consumption or for the preparation, manufacture, or storage of any such food for the purpose of trade or sale;

(ii) enter upon any premises for the purpose of exercising the powers of purchasing or taking a sample under Section 18 and may in such premises inspect and examine any food and any apparatus, utensil or vessel used for preparing, manufacturing or containing such food.

(iii) enter into and inspect any market, godown, shop, stall or other place used for the manufacture, storage or sale of any apparatus, utensil or vessel ordinarily used or intended to be used or likely to be used for preparing, manufacturing or containing any food.

(3) If any such food as is mentioned in sub-section (1) or Clause (a) of sub-section (2) appears to the Inspector to be injurious to health, unwholesome, unfit for human consumption or not of the same nature, substance or quality which it purports to be, or not fulfilling the prescribed conditions subject to which such food is to be prepared, manufactured, kept, stored or sold or if any such apparatus or utensil as is [mentioned in Clause(ii) of sub-section (2)] is of such kind or in such state as to render any food prepared, manufactured or contained therein or may ordinarily, prepared manufactured or contained therein unwholesome or unfit for human consumption or injurious to health, he may seize and remove such food, apparatus or utensil to be dealt with as hereinafter provided.

(4) An Inspector may, instead of removing such food, apparatus, utensil or vessel seized under sub-section (3), leave the same in the custody of the person from whose possession, custody or control the same was seized or in such safe custody as he may deem fit, so as to be dealt with as hereinafter provided; and he may at any time thereafter remove the same to the custody of the Local Authority concerned.

(5) (a) When any food, apparatus, utensil or vessel is seized under sub-section (3), it may be destroyed by the officer making the seizure with consent in writing of the owner or the person in whose possession, custody or control it is found.

(b) If any food seized under sub-section (3) is of a perishable nature and is, in the opinion of the Inspector unsound, unwholesome or unfit for human consumption, it may be destroyed without such consent but in the presence of two respectable witnesses.

(6) An Inspector shall prepare a statement describing the food, apparatus or utensil seized and shall deliver a copy thereof to the local Authority and to person from whose custody the food, apparatus or utensil is seized or, if such person be not present, send such copy to him by post.

(7) (a) Any person claiming anything seized under sub-section (3) may within seven days of the seizure complain to any Magistrate of the first class having jurisdiction at the place of seizure, who after making such enquiry as he may deem necessary, may either confirm or disallow such seizure wholly or in part or may order the article to be restored to the claimant.

(b) If the Magistrate confirms the seizure, the food, apparatus, utensil or vessel, as the case may be forfeited to the Food Authority concerned or the Magistrate may direct that such food, apparatus, utensil or vessel may be destroyed or disposed of at the cost of the owner or person in whose possession, custody or control it was found at the time seizure in such manner as to prevent the same being again sold, kept stored or used as food or for the manufacture or preparation of, or for containing, any such food.

(8) If no complaint is made within the said period of seven days, the article of food or the apparatus, utensil or vessel, as the case may be, seized shall be confiscated to the food Authority concerned.

18. Purchase of samples, etc.—(1) An Inspector may, for the purpose of analysis purchase a sample of food—

(a) in transit;

(b) sold, offered for sale, hawked about, kept or stored or received for the purpose of preparing or manufacturing therewith any food; or

(c) Kept or stored in a market godown, shop, stall, hotel, restaurant or eating house for the purpose of trade or received therein for the purpose of preparing or manufacturing therewith any food.

(2) No person shall refuse to sell food to an Inspector intending to purchase for the purpose of sub-section (1) in such reasonable quantity and from such container as he may ask for.

Explanation.—The purchase or sale of a sample of any food for the purpose of analysis under this Act shall be deemed to be purchased or sold for human consumption or use.

(3) If, in contravention of sub-section (2), any person refuses to sell the food to the Inspector, the Inspector may without prejudice to any penalty to which such person may be liable for such contravention, seize such quantity of the food as may appear to him to be necessary, and shall give such person a certificate showing the price, nature and quantity of the food seized, the date, time and place of seizure, and on demand being made in that behalf, the price of the food seized.

(4) The Inspector shall prepare in such form as may be prescribed, a declaration in triplicate containing full particulars relating to the sample seized and such declaration shall be signed or marked both by the Inspector and the person from whose possession, custody or control the food has been seized, and a copy thereof shall be given to such person.

(5) When a sample is taken from the stock in the possession of a commission agent, he shall be bound to give the name and such other particulars of the person on whose behalf such stock is held by him as the Inspector may require.

19. Right of private persons to have samples analyzed.—(1) Any person may make an application in writing to an Inspector asking him to purchase a sample of such food and from such person as may be specified in the application and to submit such sample to the Public Analyst for analysis.

(2) The cost of the sample purchased and of the analysis done under sub-section (1) shall be payable by the person making the application:

Provided that, in case the sample is found by the Public Analyst to be adulterated, any amounts paid by the applicant under this sub-section shall be refunded to him.

20. Method of taking samples.—(1) An inspector after purchasing or procuring or seizing any food with intention of submitting the same for analysis shall, forthwith, divide the food in three parts to be then and there separated and each part shall be marked, sealed or fastened in such mariner as the nature of the case will permit; and the person from whom the sample is taken may, if he so desires, also affix his seal or mark on each of the three parts.

(2) An Inspector shall.—

(a) if required to do so deliver one part to the person from whom the article is purchased or seized or the sample is taken;

(b) retain one part for future comparison; and

Provided that where the sample is taken from any food which is about to be imported or is in transit or at the place of delivery to the purchaser, consumer or consignee or is unclaimed, the first-mentioned part of the sample shall be retained by Inspector, unless the name and address of the consignor appear on the container containing the article sampled, in which case he shall forward that part to the consignor by registered post or otherwise, together with a notice informing that person that the sample would be analyzed by the Public Analyst.

21. Certificate of Analyst.—(1) The Public Analyst upon receiving any food or a sample of food from the Inspector shall, as soon as possible, analyze the same and deliver or send to the Inspector forwarding the sample, on payment of such fees as may be prescribed, certificate in the form specified in the Schedule showing the result of the analysis.

(2) A copy of such certificate may be obtained from the Public Analyst by the person from whom the article so analyzed was purchased or obtained on payment of a fee of five hundred rupees.

(3) No person shall display any such copy on his premises or use copy as an advertisement.

22. Power of Government to have articles analyzed.—Government may, in relation to any matter appearing to it to affect the general interests of the consumers of any food, direct any public servant shall have all the powers of an Inspector under this Act.

Provided that.—

(a) the public servant upon receiving the certificate of the Public Analyst shall take proceedings or cause proceedings to be taken as if he himself had caused such analysis to be made;

(b) any fee prescribed for such analysis, the cost of the sample and the expenditure incurred in procuring it, including the traveling allowance, if any, of the public servant procuring the same shall be payable by the Local Authority of the area from where the sample is procured.

CHAPTER - IV

PENALTIES AND PROCEDURE

23. Penalties.—(1) Whoever contravenes provisions of Section 12, or 21, shall be punished with imprisonment of either description for a term which may extend to three years or with fine or with both.

(2) Whoever contravenes the provisions of Sections7, 8, 9, 10, 11 or 18, shall be punished with imprisonment of either description for a term which may extend to five years or with fine or with both but the term of imprisonment shall not be less than six months and the fine shall not be less than five thousand rupees.

(3) Whoever contravenes the provision of Sections 3, 4, 5, 6, or 13 shall be punished with imprisonment of either description for a term which may extend to seven years and with fine, but the term of imprisonment shall not be less than one year and the fine shall not be less than five thousand rupees.

24. Power to try summarily.—Notwithstanding anything to the contrary contained in the Code of Criminal Procedure, 1898 any Magistrate for the time being empowered to try in a summary way the offences specified in sub-section (1) of ection 260 of the Code of Criminal Procedure, 1898 may try summarily any offence made punishable under Clause (a) of sub-section (1) of section 23 of this Act or sub-section (2) of the said section in accordance with the provisions of Chapter XX11 of that Code.

25. Presumption.—In every prosecution under this Act relating to any food the Court shall presume.—

(a) that any food found in possession of any person, who is or has been habitually found manufacturing, selling, keeping, storing, offering or exposing for sale or hawking about such food, was being manufactured, sold, kept, stored, offered or exposed for sale or hawked about by such person;

(b) that any food commonly used for human consumption is sold, kept or stored for human consumption;

(c) that any food commonly used for the preparation or manufacture of such food, was intended to be prepared or manufactured for human consumption;

(d) that any substance capable of being used in the manufacture or preparation of any food commonly used for human consumption, which is found on premises in which such food is manufactured or prepared, was intended to be used in the manufacture or preparation of such food;

(e) that any food is not of the nature, substance or quality it purports to be, if it is deficient in any of its normal constituents to the extent specified in the rules made under this Act or if any extraneous matter has been added to it in contravention of such rule.

26. Declaration under Section 18 to be evidence.—A declaration signed or marked Under sub-section (4) of Section 18 may be produced as evidence of the fact contained therein in any enquiry, trial or other proceedings under this Act.

27. Certificate of Public Analyst to be evidence of fact therein stated.—(1) The production in any enquiry, trial or other proceedings under this Act of a certificate under the hand of a Public Analyst in the form specified in the schedule shall, until the contrary is proved, be sufficient evidence of the facts therein stated.

(2) When any person is accused of an offence under this Act, he may require the Court to summon as a witness the Public Analyst who analyzed the food or sample of food in respect of which he is accused of having committed an offence and the Court may, and shall, in every case in which the accused deposits in the Court a sum of money in accordance with the sale prescribed, summon the Public Analyst and if such person is acquitted, any sum of money so deposited shall be refunded to him.

28. Analysis by Chemical Examiner.—(1) The Court may of its own accord or on the request of the accused cause any food or sample of food to be sent for analysis to the Chemical Examiner to Government who shall thereupon with all convenient speed analyze the same and report the result of the analysis to the Court in the form specified in the schedule, and the cost of such analysis shall be paid by the accused if the Court so directs.

(2) The certificate of the Chemical Examiner to Government shall, until the contrary is proved, be sufficient evidence of the facts therein stated, but if the Court considers it necessary in the interests of justice it may summon him to give evidence in connection with the certificate issued by him and in such a case the cost of summoning the Chemical Examiner to Court shall be paid by the accused or the Local Authority as the Court may direct.

(3) The provisions of sub-section (3) of section 21, shall apply in respect of the report of the Chemical Examiner.

29. What is or is not a good defence in a prosecution under the Act.—(1) In any prosecution under this Act relating to any food it shall be no defence to allege—

(a) that the accused was ignorant of the nature, substance or quality of the food; or

(b) that the purchaser having bought only for analysis was prejudiced.

(2) The seller shall not be deemed to have committed an offence under this Act if he proves.—

(a) that the food sold was purchased or obtained as agent by him as being of the same nature, substance or quality as that demanded by the purchaser and with written warranty to the effect that it was of such nature, substance, or quality;

(b) that he had no reason to believe at the time when he sold it that the food was not of such nature, substance or quality as required; and

(3) No evidence of a warranty under clause (a) of sub-section (2) shall be admissible on behalf of the seller—

(a) Unless the seller has on or before the first day of hearing of the case in the court against him sent to the Inspector a copy of the warranty (together with a translation thereof in English) with notice stating that he intends to rely on it and specifying the name and address of the person from whom he received it and has also sent a like notice of his intention to the person; and

(b) Unless such warranty is given by a person permanently residing or carrying on business in Pakistan.

(4) The Court shall summon the warrantor as a co-accused if it admits the warranty on behalf of the seller.

30. Forfeiture of food upon conviction.—In the case of any conviction under this Act the convicting Magistrate may order that any food to which the conviction, relates, together with all packages or vessels containing the same, shall be confiscated to Government and disposed of as the Magistrate may direct.

31. Expenses of analysis to be paid by offenders on conviction.—When any person is convicted of an offence under this Act, the convicting Magistrate shall order that all fees and other expenses incidental to the analysis of any food in respect of which the conviction is made, which shall in no case be less than one thousand rupees, be paid by the person convicted, in addition to the fine, if any, which he may be sentenced to pay and the amount of such fees and expenses may be recovered as if it were a fine.

32. Offences under the Act not to be tried by a Magistrate exercising lesser power than Magistrate of the First Class.—No offence under this Act or the rules made thereunder shall be triabal by a Magistrate exercising powers less than those of a Magistrate of the First Class.

33. Cognizance of offences.—Offences under this Act shall be cognizable and non-bailable.

CHAPTER- V

MISCELLANEOUS

34. Protection of action taken under the Act.—No suit, prosecution or other legal proceedings shall lie against any person for anything which is in good faith done or intended to be done in pursuance of any provision of this Act.

35. Inspector to be deemed public servant.—An Inspector while exercising any of the functions conferred upon him by or under this Act and all other persons assisting him in discharging such functions shall be deemed to be public servants within the meaning of Section 21 of the Pakistan Penal Code, 1860 (XLVof 1860).

36. Power of Government to appoint public servant to exercise the function of any Local Authority.—(1) If the Deputy Commissioner of a district receives information from the Director or has reason to believe that a Local Authority has failed to execute or enforce any of the provisions of this Act in relation to any food and that the failure effects the general interest of the consumers, he may, after making such inquiry from the Local Authority as he thinks fit, by order, empower any public servant to execute or enforce these provisions or to procure the execution or enforcement thereof in relation to such food and the order may fix a reasonable remuneration to be paid to such public servant, and such remuneration together with any expenses incurred by the public servant in performing the duties of the Local Authority under this Act shall be paid by the Local Authority.

(2) If the expenses and remuneration are not so paid, the Deputy Commissioner may make an order directing any person who for the time being has custody of any money on behalf of the Local Authority, as its officer, treasurer, banker or otherwise, to pay such expenses and remuneration from such moneys as he may have in his hands or may from time to time receive, and such person shall be bound to obey such order.

(3) When the Deputy Commissioner makes any order under this section, he shall forthwith forward to the Home Secretary and to the Local Authority affected thereby a copy of the order with a statement of the reason for making it, and it shall be in the discretion of the Home Secretary to rescind the order, or to direct that it may continue in force with or without modifications.

(4) The Home Secretary forthwith submit to Government a report of every case occurring under this section, and Government may confirm, revise or modify the order, or make in respect thereof any other order which the Home Secretary could have made:

Provided that no order of the Deputy Commissioner or the Home Secretary passed under this section shall be confirmed, revised, or modified by Government without giving the Local Authority a reasonable opportunity of showing cause against such order.

37. Delegation.—Government may delegate all or any of its powers and functions under this Act to the Director or any other officer by name or designation.

38. Power to make rules.—(1) Government may frame rules for the purpose of carrying into effect the provisions of this Act.

(2) In particular and without prejudice to the generality of the foregoing power, Government may frame rules.—

(a) prescribing the qualifications of person who may be appointed public analysts for the purpose of this Act;

(b) Regulating the appointment and qualifications of persons to be appointed as Inspectors under this Act;

(d) Fixing the fee to be paid in respect of the analysis of any food by a public Analyst;

(e) Prohibiting the use of any particular matter or ingredient in the manufacture or preparation of any food;

(f) specifying the conditions (which include the addition of a colour or any other substance) subject to which any food shall be manufactured, sold, kept, stored, offered or exposed for sale;

(g) Prohibiting the keeping or storage of foods other than those approved under rules;

(h) securing the cleanliness and free from contamination of any food in the course of its manufacture, preparation, storage, packing, carriage, delivery or exposure for sale, and securing the cleanliness of places, receptacles, packages, wrappings, appliances and vehicles used in such manufacture, preparation, storage, carriage or delivery;

(i) Prescribing the method, in which labels shall be affixed, languages in which the labels shall be printed and symbols which shall be used for different kinds of food;

(j) Prescribing the manner in which, and the conditions subject to which a license is to be granted under Section 11;

(k) Prescribing the form, and the particulars to be entered in the register to be kept under Section 12;

(l) Authorizing a person taking a sample of milk or any other food for the purpose of analysis to add preservatives to such samples for maintaining it in a suitable condition for analysis and regulating the nature and method of addition of such preservative;

(m) Prohibiting the use or addition as a preservative of any article, material, or substance in the manufacture or preparation for sale of any food;

(n) Prescribing the fees which a local Authority may levy for the grant of a license; and

(o) Prescribing the fees to be deposited in Court for summoning a public Analyst.

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[1] Where applicant is a body corporate or a firm

[4] Where applicant is a body corporate or a firm

[5] Where applicant is a body corporate or a firm

[7] Where applicant is a body corporate or a firm

[10] Where applicant is a body corporate or a firm

[11] Where applicant is a body corporate or a firm

[15] Where applicant is a body corporate or a firm

[18] Where applicant is a body corporate or a firm

[19] Where applicant is a body corporate or a firm

[21] Name of the authorized intermediary