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      Specialized Companies Division
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Registration Guidelines

 
Stock Exchange
Eligibility for Registration
Under section 4 of the Securities and Exchange Ordinance, 1969, any Stock Exchange which fulfills such conditions or complies with such requirements as may be prescribed to ensure fair dealings, protection of investors and its sustainable economic viability shall be eligible for registration. These requirements, among other matters, may relate to the following.

  • qualifications for membership and admission, exclusion, suspension, expulsion and re-admission of members therein to or therefrom;
  • constitution and powers of the governing body and the powers and duties of the office bearers;
  • representation [from a class or classes of persons or professions] on the governing body of a Stock Exchange or any of its Committees;
  • the manner in which business should be transacted including restrictions on the business of the members;
  • Memorandum and Articles of Association, rules, regulations and by-laws of a Stock Exchange; and
  • The maintenance of accounts and records including those of members, and their audit.

Requirement for Registration
Under section 5 of the Securities and Exchange Ordinance, 1969, any Stock Exchange which is eligible for registration under section 4 can apply to the SECP for registration on Form I, First Schedule, on payment of prescribed fee.

Grant of Certificate of Registration
The SECP, if it is satisfied, after such inquiry and after obtaining such further information as it may consider necessary that the Stock Exchange is eligible for registration and that it would be in the interest of the trade and also in the public interest to register the Stock Exchange may grant a certificate of registration to the Stock Exchange.

 

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Central Depository Company

Eligibility for Registration
Rule 3 of Central Depository Companies (Establishment and Regulation) Rules, 1996 sets out the eligibility requirements for a company desirous of commencing business as a central depository company, which are as the following.

  • That such company is incorporated as a public limited company under the Companies Ordinance, 1984 (XLVII of 1984);
  • that such company has entered into equity participation or technical collaboration arrangement with an internationally recognized institution or agency;
  • that at least one stock exchange in Pakistan is a shareholder of such a company;
  • that no promoter, director , officer or employee of such a company-

    • 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;
    • has been associated with any illegal banking business, deposit taking or financial dealings;
    • has been a sponsor, director, chief executive or a senior management officer of a defaulting co-operative finance society or finance company; and
    • has been a defaulter of any commercial bank or financial institution including non-banking financial institution or has suspended payment or has compounded with his creditors; and

  • that the promoters of such company are persons of means and integrity and have special knowledge of matters which the company may have to deal with as a central depository company.

Requirement for Registration
Under Rule 4 of the Central Depository Companies (Establishment and Regulation) Rules, 1996, a company, which is eligible for registration under rule 3 as a central depository company, can make an application to the SECP in Form I. The application must be accompanied by a fee of five hundred thousand rupees as registration fee.

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 to such company on such conditions as it may deem appropriate.

 

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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

    • 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;
    • Has associated with any illegal banking business, deposit taking or financial dealings;
    • Has been a sponsor, director, chief executive or a senior management officer of a defaulting co-operative finance society or finance company; or
    • 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.

Requirement 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.

 

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Agents and Brokers

Application for Registration
A member desirous of acting as broker shall make an application to the SECP in Form as set out in the First Schedule of the Brokers and Agents Registration Rules 2001 for grant of a certificate of registration through the stock exchange of which he is a member. The exchange shall forward the application to the SECP within 14 days from the date of its receipt.

Eligibility for Registration

  • A person is eligible for registration as a broker, if he -
  • is a member of the stock exchange;
  • is not less than twenty one years of age;
  • is a citizen of Pakistan;
  • 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.
  • has at least passed graduation or equivalent examination from an institution recognized by the Government;
  • Provided that the SECP may relax the educational qualification in suitable cases on merit having regard to the applicant’s experience;
  • is not a lunatic or a person of unsound mind;
  • has not been convicted of an offence involving fraud or breach of trust;
  • has not been adjudicated as insolvent or has suspended payment or has compounded with his creditors ;
  • has experience of not less than five years in the business of buying selling or dealing in securities;
  • has not been a partner of a brokerage firm or a director of a brokerage company which has been convicted of an offence concerning brokerage;
  • has not defaulted in payment of dues at clearing house;

Grant of Certificate of Registration
The SECP, if it is satisfied that the applicant is eligible for registration as a broker, and that it is in the interest of the stock market to do so, may grant certificate of registration to the applicant. The certificate of registration of a broker shall be valid for one year from the date of issue.

Renewal of Registration
The certificate of registration is renewable on payment of fee as prescribed in the Second Schedule of the Rules. Requirements of initial registration are applicable to renewal of the registration.

 

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