Amendments to Securities Brokers Regulations approved

Revision comes after comprehensive consultations with all stakeholders

ISLAMABAD: In a bid to minimise custody risks and safeguard investors, the Securities and Exchange Commission of Pakistan (SECP) has approved amendments to the Securities Brokers (Licensing and Operations) Regulations, 2016.

The SECP has finalised the amendments in light of comprehensive consultations with all stakeholders, stated a press release issued by the commission on Monday.

The amended regulations introduced categorisation of securities brokers with enhanced measures for investor protection through safe custody of their assets, improved governance standards in brokerage industry, transparency and risk management.

This move will help in addressing repeated broker custody defaults which has shattered investor confidence and market integrity frequently in the past.

The regulations also catalyse migration to an effective risk-based compliance culture and a shift from the traditional way of regulating brokers alike resulting in over-regulating smaller brokers.

A concept paper proposing to introduce the new broker regime, based on global benchmarks, was first released in April 2019.

Brokers will now be categorised according to their net worth and governance requirements into three categories, namely Trading and Clearing broker (T&C), Trading and Self-Clearing (TSC) and Trading Only (TO).   

Published in The Express Tribune, February 4^th, 2020.

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