New Regime for Securities Brokers introduced by SECP

Securities and Exchange Commission of Pakistan (SECP) divided brokers into three categories ‘Trading Only’, ‘Trading and Self-Clearing’ and ‘Trading and Clearing’ category with minimum net worth and net capital balance requirements for each of the categories.

Under the categorization of securities brokers, the application for a license under these regulations may be made for any one of the following categories of securities brokers:

Trading Only

Under this category, securities broker can only execute its proprietary trades and trades on behalf of its customers but cannot settle executed trades or keep custody of securities or money owned by it and its customers.

Trading and Self-Clearing

 A securities broker can execute as well as settle its proprietary trades and trades executed on behalf of its customers and can keep custody of securities and money owned by it and its customers subject to such conditions as may be imposed by the Commission.

Trading and Clearing

A security broker under this category can execute as well as settle its proprietary trades and trades executed on behalf of its customers and can keep custody of securities and cash owned by it and its customers subject to such conditions as imposed by the Commission and, in addition, such securities broker can settle trades of other securities brokers and their customers and keep custody of the securities and cash owned by such other securities brokers and their customers.

Security brokers who want to convert to any of the above-mentioned categories are directed to apply before 15 April 2020.

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