The Securities and Exchange Commission of Pakistan (SECP) Thursday conveyed to the stock market brokers that no securities broker shall make a blank sale either for its own account or for the customers' accounts except in the manner and to such extent as provided for within the regulations of the securities exchange.
The SECP has issued amendments in the Securities Brokers (Licensing and Operations) Regulations, 2016.
The SECP has also revised regulation relating to the short selling by a securities broker.
According to the revised regulations, a securities broker shall file monthly statements of net capital balance and liquid capital with the securities exchange and clearing house computed in a manner specified in Schedules II and III respectively, immediately after coming into force of these regulations, and shall also submit an audited statement of net capital balance as on close of second quarter of its year of accounts and shall also disclose the net capital balance in its annual audited financial statements in accordance with regulations, the SECP said.
In case of overdue payment to any financial institution, CIB reports from the State Bank of Pakistan shall be examined and if there is any overdue/past due payment to a financial institution, irrespective of amount, in overdue column of the latest CIB report of the person and of the companies, firms, sole proprietorship etc. where such person is a chief executive, director (other than nominee director), owner or partner or sponsor etc., such person shall not be considered fit and proper person except: (a) in case where such overdue amount is under litigation and the same is also appearing as amount under litigation in CIB report; or (b) No overdue payment is appearing in the overdue column in the subsequent latest CIB report; or (c) such person provides the documentary evidence of having no directorship in companies, firms, sole proprietorship etc., other than brokerage house, showing overdue status in their CIB reports. In case of overdue amount in CIB report, no rejection shall be made unless the person has been provided an opportunity of making a representation before the Commission, SECP added.
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