Commodity Exchange has several benefits associated with it. The most important of them are price discovery and price risk management. Licensing of a commodity exchange is covered under section 5 of the Futures Market Act, 2016.
All commodity brokers are required to be registered with SECP for providing service as broker. Licensing of commodity brokers is covered by the Commodity Exchange and Futures Contracts (CEFC) Rules, 2005. The CEFC Rules prescribe the eligibility conditions, registration procedure, and obligations and responsibilities of brokers. Further, the CEFC Rules also prescribe procedure for registration of commodity futures contracts.
Registration of Commodity Brokers
An application for registration by persons meeting the eligibility criteria as mentioned under sub-rule 1 of Rule 11 of the CEFC Rules, 2005 shall be made to the Commission along with a receipt evidencing payment of non-refundable fee.
The Commission, while considering the application for registration, may require the applicant to furnish such further information or clarification regarding its activities and businesses as it deems appropriate. The applicant shall, if so required by the Commission, appear before the Commission for personal representation through an officer duly authorized for this purpose in writing by the board of directors of the applicant.
Renewal of Commodity Broker
Renewal of registration of broker is subject to compliance with Rule 11 of the CEFC Rules, 2005. Accordingly, the certificate of registration shall be renewable on payment of fee as specified by the Commission.
The detailed procedure for registration/renewal as mentioned above may be viewed at the following link: