Securities brokers: SECP issues SRO to amend licensing, operations rules

ISLAMABAD: A person desirous of performing the functions of securities broker shall take prior permission from the Securities and Exchange Commission of Pakistan (SECP) to undertake securities broker activity by incorporating the securities broker company.

The SECP has issued an SRO 1914(I)/2022 to amend the Securities Brokers (Licensing and Operations) Regulations, 2016.

According to the amended regulations, a person desirous of performing the functions of securities broker shall, before obtaining TRE Certificate of a securities exchange, make an application to the Commission as set out in Form A-1 along- with the documents specified in Annexure A-1.

The Commission, while considering the application for permission may require the applicant to furnish such further information or clarification, as it deems appropriate.

The Commission, if it is satisfied that the person seeking permission to perform the functions of securities broker has fulfilled the criteria in terms of these regulation may permit by an order in writing to incorporate a securities broker company.

The permission granted shall be valid for a period of six months unless extended for a maximum period of further three months under special circumstances, on the application of the sponsors made before the expiry of initial six months.

During the validity of this permission, the sponsors shall obtain the TRE Certificate from securities exchange, get the securities broker company incorporated and submit an application to the Commission for grant of licence, after fulfilling all the conditions specified in these regulations, the SECP said.

The affidavit will also be submitted to the SECP stating that he has not been associated with any illegal banking business, deposit taking or financial dealings; he and companies in which he is a director or substantial shareholder have no overdue loans or installments outstanding towards banks or other financial institutions; neither he nor companies in which he is a director or substantial shareholder has defaulted in paying taxes as on the date of application; he has not been promoters or sponsor, director or chief executive of a defaulting cooperative finance society or finance company; he has never been convicted of fraud or breach of trust or of an offence involving moral turpitude or removed from service for misconduct; he has neither been adjudged an insolvent nor has defaulted in making payments, to his creditors, the SECP added.