Regulatory Alerts2021-01-01
Securities (Brokerage Fees for Turnaround Trades) (Amendment) Rules 2021
The Financial Services Commission issued these amendment rules to modernize brokerage fee regulations for turnaround trades by replacing legacy definitions of CDS and SEM with licensed clearing facilities and securities exchanges. Investment dealers must now charge fair brokerage fees relative to transaction values, publish their maximum fees on company websites according to a prescribed schedule, and remit 0.005 percent of each transaction's consideration to the Commission. The regulator retains authority to mandate downward fee revisions when charges prove excessive or abusive, with the updated framework taking effect on 3 April 2021.
Veemul MPro3/Govt Notices/2021/Turnaround Trades- 03.04.2021 - 2nd Proof Government Notice No. 76 of 2021 THE SECURITIES ACT FSC Rules made by the Financial Services Commission under section 93 of the Financial Services Act and section 155 of the Securities Act
- These Rules may be cited as the Securities (Brokerage Fees for Turnaround Trades) (Amendment) Rules 2021.
- In these Rules, “principal rules” means the Securities (Brokerage Fees for Turnaround Trades) Rules 2013.
- The principal rules are amended – (a) in rule 2, – (i) by deleting the following definitions – (A) CDS; and (B) SEM (ii) by inserting in the appropriate alphabetical order the following new definitions – (A) “Clearing & Settlement Facility” means a clearing & settlement facility licensed under the Securities Act; (B) “Securities Exchange” means a securities exchange facility licensed under the Securities Act. (iii) by deleting in the definition of “trade” or “transactions”, the words “the Automated Trading System of the SEM” and replacing same by the words “trading platform of a Securities Exchange.” Government Notices 2021 1383
Veemul MPro3/Govt Notices/2021/Turnaround Trades- 03.04.2021 - 2nd Proof (b) by deleting rule 3 and replacing same by – 3. Brokerage Fee (1) The brokerage fee claimed by an investment dealer from its client shall be a fair amount with regard to the value of the consideration of the transaction, after taking into consideration factors such as costs, fees payable to the securities exchange, the clearing and settlement facility and the Commission. (2) Every investment dealer shall publish its maximum brokerage fee prominently on its website disclosing the information prescribed in the schedule to these Rules. (3) The Commission reserves the right to require the maximum brokerage fee to be revised downwards if, in the opinion of the Commission, it is excessive or abusive. (4) The amount payable to the Commission shall be 0.005% of the value of the consideration of the relevant transaction. (c) in PART I of the SCHEDULE, by deleting from the table, the following columns – (i) Investment Dealer; (ii) SEM; (iii) CDS; and (iv) Total brokerage fee claimed for apportionment. (d) in PART II of the SCHEDULE, by deleting from the table, the following columns – 1384 Government Notices 2021
Government Notices 2021 1385 Veemul MPro3/Govt Notices/2021/Turnaround Trades- 03.04.2021 - 2nd Proof (i) Investment Dealer; (ii) SEM; (iii) CDS; and (iv) Total brokerage fee claimed for apportionment. 4. These Rules shall come into operation on 3 April 2021. Made by the Financial Services Commission on 3 April 2021. Veemul MPro3/Govt Notices/2021/Turnaround Trades- 03.04.2021 - 2nd Proof