SECP Directs Brokers to Obtain Broker Fiduciary Rating

The Securities and Exchange Commission of Pakistan (SECP) has directed all existing brokers licensed as Trading and Self-Clearing to obtain a Broker Fiduciary Rating within a such time period as may be specified by the Commission.

The SECP issued draft amendments to the Securities Brokers (Licensing and Operations) Regulations, 2016 on Monday.

According to the amended regulations, the SECP has revised requirements for a license under the Trading and Self-Clearing and Trading and Clearing categories. The license for Trading and Self-Clearing or Trading and Clearing categories shall only be granted to an applicant which has also been admitted as a clearing member by the clearing house and a participant by the central depository.

The amended regulations reveal that all existing brokers licensed as Trading and Self-Clearing shall obtain a Broker Fiduciary Rating within such time as may be specified by the Commission.

The applicants opting for the Trading and Self-Clearing category shall comply with the following minimum requirements:

It must maintain a minimum Broker Fiduciary Rating of BFR-3, as may be specified by the Commission, from a credit rating company licensed by the Commission and disclose such rating at all times on its website and all advertisements.

It must appoint its statutory auditor from category A or B of the panel of auditors maintained by the State Bank of Pakistan.

It must comply with such additional requirements for submission of returns and statements in relation to the segregation of customers’ assets including reconciliations of customer assets as specified by the Commission from time to time, the regulations added.



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