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CLEARING HOUSE

Eligibility for Registration
Rule 3 of Clearing Houses (Registration and Regulation) Rules, 2005 sets out requirements for any person desirous of commencing business as a clearing house, which are:-

That such person is incorporated as a public limited company under the Ordinance of 1984;
That at least one stock exchange in Pakistan is a shareholder of such house;
That no promoter, director, officer or employee of such house
  1. Has been convicted of fraud, breach of trust or an offence involving moral turpitude or removed from service for misconduct or has been adjudicated as insolvent;

  2. Has associated with any illegal banking business, deposit taking or financial dealings;

  3. Has been a sponsor, director, chief executive or a senior management officer of a defaulting co-operative finance society or finance company; or

  4. Has been a defaulter of any commercial bank or financial institution or non-banking financial institution or has suspended payment or has compounded with his creditors;
That promoters of such house are persons of means and integrity and have special knowledge of matters which the house may have to deal with as a clearing house; and
   
That such person has complied with such other conditions as may be required by the SECP in the interest of the capital market.

REQUIRMENT FOR Registration
Under Rule 4 of the Clearing Houses (Registration and Regulation) Rules, 2005, any person eligible for registration under rule 3 of the Clearing Houses (Registration and Regulation) Rules, 2005 can make an application to the SECP in such manner as the SECP may prescribe from time to time. The application must accompanied by a fee as may be specified by the SECP with the approval from policy board. 

Grant of certificate of registration
If the SECP is satisfied, after such inquiry and after obtaining such further information as it may consider necessary, that the applicant is eligible for registration and it would be in the interest of the capital market so to do, may grant a certificate of registration under its seal to such house.