KARACHI: Under the regulatory impetus of Securities and Exchange Commission of Pakistan (SECP), Central Depository Company (CDC), in collaboration with PSX and NCCPL has launched Pakistan’s first Professional Clearing Member.
Around 25 Trading Only Brokers have signed up for the services of the new PCM. By December this year, the new regime will be completely implemented, and all Trading Only Brokers will start using the services of PCM by shifting their clearing, settlement and custody functions to PCM.
The new PCM regime has been successfully implemented after the introduction of relevant regulatory framework by SECP and capital market infrastructure entities, leading to the launch of EClear Services Limited (ESL).
SECP assigned the task of implementing this novel concept in Pakistan to all the three SROs in the Capital Market, i.e., CDC, PSX and NCCPL. CDC was assigned to lead the implementation as the Project Manager.
Professional Clearing member (PCM), which is also known internationally as General Clearing Member (GCM), is an international best practice of “Third Party Clearing” service provider whereby an entity, which is normally not a trading member of the Exchange, provides Clearing and & Custodial services to trading members of the Exchange, who either voluntarily or by virtue of regulatory framework are not acting as Clearing members of the Clearing house.
Copyright Business Recorder, 2021
Comments
Comments are closed for this article.