SEC appeals against HC stay order

FE Team | Published: September 30, 2010 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The securities regulator Wednesday appealed against the High Court order staying its directive on margin loan and suspension of netting facility on non-marginable securities.
Hearing, however, is likely to take place today (Thursday).
Attorney general Mahbubey Alam moved on behalf of the Securities and Exchange Commission (SEC).
Hearing did not take place as outgoing Chief Justice Syed Mudassir Hussain attended his office for the last time on the day.
On Monday, two investors filed a writ petition challenging the SEC's directive on the NAV-based margin loan calculation and suspension of netting facilities for non-marginable securities.
Following the writ petition, an HC bench stayed the SEC's directive for a period of three months.
The stay order means merchant banks and stockbrokers will not have to follow the net asset value-based calculation in providing and maintaining margin loans until the court issues an order.
The HC bench also issued a rule upon the government and the SEC to explain within four weeks as to why they should not be directed to take steps to create an investment-friendly environment and help keep the stockmarket stable.
The rule also required the government and the regulator to explain as to why the SEC directives will not be declared illegal.
The bench of Justice Mamnoon Rahman and Justice Syeda Afsar Jahan passed the order and the rule following a writ petition filed jointly by two investors Morshadur Rahman and Shahnewaj Jewel.
Barrister Sheikh Fazle Noor Taposh and Barrister Abul Kalam Azad appeared for the petitioners.
In another development, hearing on AIMS First Mutual Fund started from Wednesday and will continue today.
Earlier, a lawyer on behalf of the investors filed a writ petition on behalf of investors challenging the securities regulator's rejection of rights offer announced by the trustee of the fund.
The trustee of the mutual fund has announced 70 per cent stock dividend for 2007-08 and 2008-09 and a 130 per cent rights entitlement.