PSBA Wins Case Against SECP Over ‘Unconstitutional’ Trading Criteria

PSX | ProPakistani

The Pakistan Stock Brokers Association (PSBA) successfully challenged the Securities and Exchange Commission of Pakistan (SECP) regarding the Futures Eligibility Criteria (FEC) for trading in the Deliverable Futures Contract (DFC) and Cash Settled Futures Contract (CSF) Market. The criteria, issued by the Pakistan Stock Exchange (PSX) in a notice dated June 17, 2021, was contested by the PSBA through a Constitutional Petition (CP) filed in July 2021 before the High Court of Sindh.

The PSBA argued that the FEC’s Criteria 4(i) was illegal as it was not subjected to public comment and violated constitutional provisions. The petition requested the court to declare Criteria 4(i) void, suspend its operation, and permanently restrain the SECP and PSX from acting upon it.

The court granted an interim order on July 15, 2021, suspending the operation of the latter part of Criteria 4(i). Recently, the court ruled in favor of the PSBA, declaring Criteria 4(i) illegal and unconstitutional. The ruling stated that the SECP failed to meet the statutory requirement of public notice under Section 169(4) of the Securities Act (SA), 2015, when introducing Criteria 4(i).

The court emphasized that the SECP’s introduction of Criteria 4(i) contravened the right to due process and access to justice, violating fundamental rights under Articles 9 and 25 of the Constitution. Consequently, the impugned Criteria 4(i) was struck down as unconstitutional.

The PSBA expressed its commitment to promoting the stock brokerage industry and protecting its members’ rights, continuing to work for the betterment of the capital market and Pakistan’s economy.

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