Karachi September 25 2022: Attention of all regulated entities of Pakistan Stock Exchange Limited (PSX) and other persons is invited to ‘PART X’ of the Securities Act, 2015 (Act), which pertains to Insider Trading and strictly prohibits a person from indulging in Insider Trading in any manner whatsoever.
Insider Trading refers generally to an insider person executing any trade or deal, directly or indirectly, involving listed securities on the basis of Inside Information relating to such security which is not publically available. It also includes execution of any trade or deal, directly or indirectly, by a person based on Inside Information in his her possession or shared or disclosed by an Insider.
Insider Trading is a market abuse and damages the market integrity and undermines investor confidence in the fairness and integrity of the securities markets, hence, it is prohibited in most of the jurisdictions.
PSX is empowered under the Act to detect these unfair practices. In exercise of this power, PSX conducts monitoring and surveillance activities to detect potential breaches of fiduciary obligations including Insider Trading. PSX may refer the potential cases of Insider Trading to the Commission for thorough investigation and punishment in accordance with Section 159(1) of the Act. It is pertinent to highlight that the Insider Trading is an offence under the Act and is punishable with significant monetary sanctions as well as imprisonment.
In case of an Individual imprisonment of either description for a term which may extend to three years or to a fine which may extend to two hundred million rupees or three times the amount of gain made or loss avoided by such person, or loss suffered by another person, whichever amount is higher.
For a company a fine which may extend to three hundred million rupees or three times the amount of gain made or loss avoided by such company, or loss suffered by another person, whichever amount is higher.
