Annual Report 2012 - Lahore Stock Exchange

Directors’ ReportSTATUS OF THE INVESTOR COMPLAINTS AND ARBITRATION AWARDS Statistics of Investor Complaints:Opening Balance: (as on 01 January, 2012) 784Received Complaints & Appeals (01 January, 2012 to 30 October, 2012) 1575Disposed Off (01 January, 2012 to 30 October, 2012) 99Pending Complaints* & Appeals (as on 30 October, 2012) 2260It may be noted that most of the complaints are pending for adjudication due to restraining orders of the Courts. Pending Investor Complaints before the Arbitration Committee:Pending beforeNumber of ComplaintsSole Arbitrator/Panel of Arbitrators 31The Appellate Bench 3 Pending Investor Complaints against the expelled Members:Sr. No. Complaints against Number of Complaints Amount Involved1 M/s. Khalid Javed Securities (Pvt.) Ltd. 365 64,851,1312 M/s. HSZ Securities (Pvt.) Ltd. 132 54,435,9033 M/s. Wasi Securities (SMC-Pvt.) Ltd. 74 74,984,4784 M/s. Ali Usman Brokerage (Pvt.) Ltd. 84 65,307,6265 Mr. Muhammad Tauqir Malik 118 31,547,3436 Mr. Shahid Nauman Rana 63 50,452,3107 M/s. Y.S. Securities & Services (Pvt.) Ltd. 1004 351,750,2758 M/s. Stock Master Securities (Pvt.) Ltd. 382 227,510,3389 Mian Muhammad Seed (Late) 04 13,457,267Total *2226 934,296,671*It may be noted that most of the complaints are pending for adjudication due to restraining orders ofthe Courts.SYSTEM AUDITS AND FOLLOW UP ACTIONSTAKEN DURING THE YEARThe Exchange has a regular system for checking thecompliance of the trading members (TREC Holders) withthe applicable Rules and Regulations. The third ballot ofSystem Audit of brokers under the Regulations GoverningSystem Audit of Brokers of the Exchange for the year2010 cycle was successfully completed within time. As ofJanuary 11, 2012 there were a total of 152 members ofwhich 81 were active, 62 were inactive, 06 were expelledand 03 were suspended. A minimum of 25% of thebrokers needed to be selected through random ballotingin accordance with the Regulations. The reports of systemaudit were received promptly within the stipulated timeof the appointment of system auditors. Consequently,wherever the Auditors highlighted departures from theRegulations, the Exchange issued show cause notices tothe brokers and solicited their explanations in person orthrough written representation. The head of InternalAudit was also asked to verify the subsequent complianceby the brokers before the show cause notices weredisposed off. The reports of System Audits of the Brokerswere sent to SECP in the prescribed format.32LAHORE STOCK EXCHANGE