PSX proposes an Indemnity Clause to protect its staff

In a bid to protect its directors and officials from liability, the Pakistan Stock Exchange (PSX) has proposed amendments in its regulations.

The bourse has proposed to have power under PSX Regulations whereby it could relax consequential actions of placement of a Listed Company on the Defaulters Segment and/or suspension of trading of its shares in any case of noncompliance of any provision of PSX Regulations by such listed company.

As per the proposal, the relaxation can be granted taking into account the following factors for a maximum of 60 days at once, which may further be extended based on the same factors colon: The relaxation is considered to be in the best interest of the shareholders / investing public; Where the company has demonstrated improvement from last reported progress towards the rectification of cause of its non-compliance.

PSX has also proposed the insertion of an indemnity clause in PSX Regulations.

“PSX, as a front light regulator plays a vital role to ensure the protection of investors in particular and all other stakeholders in general. To fulfill its responsibilities PSX has to interact with different regulatory authorities and agencies, listed companies, and TRE Certificate Holders and take enforcement actions against non-compliant regulated persons,” stated PSX in a statement.

The bourse said that considers it important that PSX Regulation should have an indemnification clause for the protection of its directors and officials in discharging their duties in good faith against any loss, claim, liability, damages, charges, expenses etc.

“In this regard, PSX also explored international practices and found at various stock exchanges in other countries have indemnification clause available in their respective regulatory frameworks.” According to, PSX is proposing to insert an indemnity clause in chapter 3 (Pakistan Stock Exchange Limited) of PSX Regulations.