Amendments to the Clearing Houses (Licensing and Operations) Regulations, 2016

Government of Pakistan
Securities and Exchange Commission of Pakistan -.-.-.- Islamabad, 1st November, 2019 NOTIFICATION S. R. O. 1305 (I)/2019.- In exercise of the powers conferred by sub-section (1) of section 169 of the Securities Act, 2015 (III of 2015), the Securities and Exchange Commission of Pakistan hereby makes the following amendments to the Clearing Houses (Licensing and Operations) Regulations, 2016, the same having been previously published in the official Gazette vide S.R.O No. 1118(I)/2019 dated September 19, 2019, and also placed on its website as required under sub-section (4) of section 169 of the Securities Act, 2015, namely:- In the aforesaid Regulations, - (1) In sub-regulation (e) of regulation 5, the phrase “, including any outsourcing arrangement as allowed under these regulations” shall be inserted after the terms “mechanism for clearing members”. (2) In clause (a) of sub-regulation (3) of regulation 11, the phrase “, unless otherwise outsourced to the extent permitted under these regulations” shall be inserted after the terms “regulatory functions of the clearing house”. (3) In clause (d) of sub-regulation (3) of regulation 11, the phrase “, unless otherwise outsourced to the extent permitted under these regulations,” shall be inserted after the terms “regulatory framework, policies and procedures” and before the terms “and take enforcement actions under”. (4) In clause (e) of sub-regulation (3) of regulation 11, the phrase “, unless otherwise outsourced to the extent permitted under these regulations” shall be inserted after the terms “required to be conducted by a clearing house”. (5) After regulation 11, the following new regulation 11A shall be inserted, namely:- 11A. Outsourcing of compliance functions.- (1) A clearing house may enter into an arrangement with a securities exchange, with the prior approval of the Commission, for outsourcing its compliance function with respect to its clearing members which are TRE certificate holders in the following manner:
a) the clearing house shall enter into a service level agreement with the securities exchange for outsourcing the compliance function after obtaining approval of its board of directors with respect to shifting of employees and defining the role, responsibilities, duties, obligations of securities exchange, scope