Section 20: Powers and functions of the Commission

20. Powers and functions of the Commission.— (1) The Commission shall have all such powers as may be necessary to perform its duties and functions under this Act 1[or any administered legislation]. (2) The Commission may, having regard to its functions and to exercise its powers efficiently, organize itself into divisions, wings or such other sub­divisions as it may consider expedient. (3) The Commission may, from time to time, identify the matters requiring the Board to make policy decisions and may also make recommendations regarding policy to the Board for its consideration. (4) The Commission shall be responsible for the performance of the following functions: (a) regulating the issue of securities; 1Ins. by Act No. XXXVI of 2016, s. 9. (b) regulating the business in Stock Exchange 1[Commodity Exchange] and any other securities markets; (c) supervising and monitoring the activities of any central depository and Stock Exchange clearing house; (d) registering and regulating the working of stock brokers, sub brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, underwriters, portfolio managers, investment advisers and such other intermediaries who may be associated with the 2[financial services market] in any manner; (e) proposing regulations for the registration and regulating the working of collective investment schemes, including unit trust schemes; (f) promoting and regulating self-regulatory organizations including securities industry and related organizations such as Stock Exchanges and associations of mutual funds, leasing companies and other NBFIs; 2[(fa) establishing and regulating entities for the protection of investors; (fb) promoting, encouraging and enforcing proper conduct, competence and integrity of regulated persons; (fc) proposing regulations for disclosure of information in public interest;] (g) prohibiting fraudulent and unfair trade practices relating to 2[financial services market]; (h) promoting investors education and training of intermediaries 1[operating in the financial services market]; 3[(ha) hearing and deciding investor complaints against persons involved in brokerage business for violations of securities, laws, rules, regulations, directives, codes, etc;] (i) conducting 2[inspections and] investigations in respect of matters related to this Act and 2[any administered legislation] and in particular for the purpose of investigating insider trading in securities and 3[initiating action against the] offenders; 2[(ia) ensuring development of a sound regulatory framework to counter and suppress illegal, improper and unfair practices in financial services market and other sectors regulated by the Commission ;] (j) regulating substantial acquisition of shares and the merger and take­over of companies; 1Ins. by Finance Act 2003 (Act No. I of 2003), s. 11. 2Ins., subs. and added by Act XXXVI of 2016, s. 9. 3Ins. and subs. by Finance Act 2008 (Act No. I of 2008), s.15 1[(ja) regulating professionals who provide services within the financial service markets;] 2 [(jb) maintaining and issuing panels of auditors from which companies may appoint auditors, and approving audit firms for financial institutions, listed companies and NBFIs;]; (k) calling for information from and undertaking inspections, conducting inquiries and audits of the Stock Exchanges and intermediaries and self-regulatory organizations in the 3[financial services market]; 3[(l) considering and suggesting reforms relating to the financial services market, regulated persons, companies and bodies corporate, including changes to the constitution, rules and regulations of companies and bodies corporate, securities exchanges or clearing houses;] (m) encouraging the organized development of the 3[financial services market and other sector regulated by the commission] in Pakistan; (n) conducting research in respect of any of the matters set out in this sub­section; (o) performing such functions and exercising such powers of the 3[* * *] Federal Government delegated to the 3[Commission] (other than the power to make any rules or regulations) under the provisions of the Ordinance, 4[the Securities and Exchange Ordinance, 1969 (XVII of 1969), the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 (XXXI of 1980)] and under any other law for the time being in force 3[or any other law which may be made after commencement of this Act,] under which any function or power has been conferred on the 3[Commission]. (p) performing such functions and exercising such powers (other than the power to make any rules or regulations) under the Ordinance or any other law for the time being in force as may, after the commencement of this Act, be delegated to it by the Federal Government and exercising any power or performing any functions conferred on it by or under any other law for the time being in force ; 5[*] (q) proposing regulations in respect of all or any of the aforesaid matters for the consideration and approval of the Board 5[; and] 5[(r) exercising all powers, discharging all duties and performing all functions assigned to the Commission under, and generally administering, the law of Insurance; (s) ensuring and monitoring compliance by insurers, insurance surveyors and insurance intermediaries of all laws, rules and regulations pertaining to insurance for the time being in force; 1Ins. by Finance Act 2007 (Act No. I of 2007), s. 17. 2Ins. by Finance Act 2008 (Act No. I of 2008), s.15 3Subs., omitted, and ins., by Act XXXVI of 2016, s. 9. 4Ins by Finance Act 1999 (Act No. IV of 1999), s.17. 5Omitted, subs. and added by Ord. No. LV of 2000, s.5 (t) regulating professional organizations connected with the insurance business; 1[*] (u) encouraging the organized development of the insurance market in Pakistan] 1[;] 2[*] (v) promoting and regulating development of Private Pension Schemes and Funds; 3[*] 3[(w) to control and minimize misconduct, market abuse and financial crime in the financial services market and other sectors regulated by Commission;] 3[(x) for regulating and facilitating the growth of Shari ah compliant financial products in the financial services market except the financial products regulated by the State Bank of Pakistan; (y) to identify and address the factors resulting in systemic risk in the markets regulated by the Commission; (z) to regulate and facilitate healthy growth of the corporate sector (private and public), and to promote good corporate governance for development of efficient management and prudent financial practices; (za) establishing a foundation or fund to provide for welfare support and facilities to the employees whether serving or retired and their families and to create, establish, organize and assist in the social and cultural activities; (zb) to regulate financial services market to ensure that they function in a fair, efficient, transparent and orderly manner; and (zc) performing any other functions entrusted to the Commission by the Federal Government from time to time.] (5) Without prejudice to the provisions of sub­section (4), the approval of the Commission shall be required by­ (a) all public companies incorporated in Pakistan which intend to issue or offer for sale securities in markets outside Pakistan or to list such securities on a Stock Exchange outside Pakistan, in each case, whether directly or through an intermediary; (b) all bodies corporate incorporated outside Pakistan which or persons who intend to issue or offer for sale, securities to the public in Pakistan or to list such securities on a Stock Exchange; and (c) all bodies corporate incorporated outside Pakistan which are already listed on a Stock Exchange, for the listing of and quotation for any additional securities. 1Omitted, subs. and added by Finance Act 2003 (Act No. I of 2003), s. 11. 2Omitted by Finance Act 2008 (Act No. I of 2008), s. 15. 3Omitted, subs. and added by Act XXXVI of 2016, s. 9. (6) In performing its functions and exercising its powers, the Commission shall strive — (a) to maintain facilities and improve the performance of companies and of 1[financial services market], in the interest of commercial certainty, reducing business costs, and efficiency and development of the economy; (b) to maintain the confidence of investors in the 1[financial services market] by ensuring adequate protection for such investors; 1[(ba) to create awareness among investors and to provide an appropriate degree of protection for investors, having regard to the general principle that investors should take responsibility for their decisions;] (c) to achieve uniformity in how it performs those functions and exercise those powers; (d) to administer laws effectively but with a minimum of procedural requirements; (e) to receive, process, and store, efficiently and quickly, the documents lodged with, and the information given to, it under this Act, the Ordinance or any other law; (f) to ensure that the documents, and the information referred to in clause (e) are available as soon as possible for access by the public; 2[*] 2[(fa) to maintain the confidence of holders of insurance policies by protecting the interests of policy holders and beneficiaries of insurance policies in all matters, including assignment of insurance policies, nomination by policy holders, insurable interest, surrender value of policies of life insurance, and other terms and conditions of contracts of insurance; (fb) to improve existing methods and devise new options for the expeditious settlement of claims and disputes between insurers and policy holders and between insurers and intermediaries; (fc) to promote efficiency in the conduct of insurance business; (fd) to promote the establishment and development of professional and educational organizations connected with insurance business with a view to improving the quality of insurance services in the country; (fe) to promote awareness among consumers with respect to the benefits of insurance and the existence of measures to safeguard the interests of mortgagors, mortgagees and potential policy holders; and] (g) to take whatever action it can take, and is necessary, in order to enforce and give effect to 1[this Act, any administered legislation] or any other law. 1Subs., ins. and added by Act No. XXXVI of 2016, s. 9. 2Omitted and ins. by Ord. No. LV of 2000, ss. 5­6. 1[(7) The Commission, and the Commissioner or officer to whom any of the functions or powers have been delegated under section 10 may, for the purposes of a proceeding or enquiry, require anyone­ (a) to produce before, and to allow to be examined and kept by, an officer of the Commission specified in this behalf, any books, accounts or other documents in the custody or under the control of the person so required, being documents relating to any matter the examination of which may be considered necessary by the Commission or such Commissioner or officer; and (b) to furnish to an officer of the Commission specified in this behalf such information and documents in his possession relating to any matter as may be necessary for the purposes of the proceeding or enquiry.]

Effective date: 1997-01-01

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