The stock market will witness a new category of “online-only” brokers that will start trading shares in the stock market through online means only.
In line with the global trend of increased digitalization in the financial markets, a new category of “online-only” brokers has been proposed to be introduced which shall enable trading in the stock market using online means only, stated the SECP’s latest report on the stock market brokers issued on Friday.
With features such as less stringent financial resource requirements, the online-only broker is intended to provide greater convenience and attract new investors in the capital market.
Centralized Digital Onboarding Platform (Centralised Gateway Portal): To augment online facilitation to financial services market investors through a standardized, centralized customer information database, CDC on the advice of SECP, developed a comprehensive concept paper for introducing and launching of an online Account Opening Portal which will act as the one-stop solution to investors of all asset classes of SECP regulated intermediaries.
A Working Group has been formed with the mandate to highlight amendments in the respective regulatory frameworks for Gateway Portal and to standardize account opening forms for onboarding of investors for all asset classes i.e. Securities Brokers, Mutual Funds and Insurance sector.
After the finalization of the regulatory and operational modalities, the Gateway Portal shall be launched. Compliance reforms for Trading-Only brokers SECP has been engaged with SROs for bringing reforms in the compliance requirements of Trading-Only (TO) Brokers following the implementation of the Professional Clearing Member (PCM) Regime.
The reforms are intended to clearly identify the responsibilities with respect to compliance of TO brokers with regulatory requirements. Bringing more transparency at general meetings Concept of scrutinizer is being introduced and mandatory appointment of at least one scrutinizer is required in the case of some businesses.
The scrutinizer would independently oversee the voting process to create greater transparency. Keeping in view the advancements in information technology, it has been made compulsory for the Board of the listed company to provide the option of electronic voting in case of election of directors and all special businesses transacted at a general meeting of the company.
This will help to provide flexibility and convenience to shareholders. The draft proposal is made public for comments, SECP report added.