The Pakistan Stock Exchange (PSX) has prohibited securities brokers from making cash withdrawals from client-titled bank accounts to ensure that all payments to customers will be made through banking channels, the main bourse informed investors.
The main bourse has amended the relevant clauses of PSX Regulations with the approval of the Securities and Exchange Commission of Pakistan with an aim to strengthen investor protection measures.
As per PSX Regulation 3.7.1A, PSX shall inform the SECP and the relevant banks of the TRE Certificate Holder regarding suspension, cancellation, or forfeiture of the TRE Certificate of such TRE Certificate Holder. Further, in case of cancellation, forfeiture, or declaration of a securities broker as a defaulter, PSX, while referring the case to the SECP, shall request it to take further appropriate action(s).
As per PSX Regulation 3.16.8, PSX is empowered to obtain account balance confirmation of any one or more of the client-titled bank accounts maintained by the securities broker with its written authority. For this purpose, PSX may require the securities broker to authorize on its letterhead the relevant officials of PSX to obtain such information from the relevant branch of the concerned bank.
As per PSX Regulation 4.17.1A, the securities brokers shall be required to submit to PSX the details of all business bank account(s) opened for holding funds as and when required by PSX. The securities broker shall be required to inform PSX within five (05) working days of the opening of a new bank account or closure of an existing bank account. Such information shall be submitted in the manner to be notified by the PSX.
As per PSX Regulation 4.23.3, cash withdrawals from the client-titled bank accounts maintained by the securities brokers shall be prohibited and all payments to customers must be made through the banking channels.
In addition to the above, PSX has also introduced a new Clause 4.9A in PSX Regulations which stipulates that a TRE Certificate Holder may pass members’ resolution for voluntary winding-up subject to mandatory compliance with the procedures prescribed therein.
Where a TRE Certificate Holder passes members’ resolution for voluntary winding-up without complying with the prescribed procedures, PSX shall suspend the trading terminals of such TRE Certificate Holder until further notice. Consequently, the earlier abrupt action of declaring such a non-compliant TRE Certificate Holder as a defaulter ipso facto under Clause 21.4 has been removed.
The above-approved amendments have become applicable with effect from June 12, 2024. The updated version of PSX Regulations is available under the Legal Framework section of the PSX website.
Follow ProPakistani on Google News & scroll through your favourite content faster!
Support independent journalism
If you want to join us in our mission to share independent, global journalism to the world, we’d love to have you on our side. If you can, please support us on a monthly basis. It takes less than a minute to set up, and you can rest assured that you’re making a big impact every single month in support of open, independent journalism. Thank you.
