Regulatory Alerts2025-10-23
Added · Updated
Circular No.14 of 2025 – Non-Executive Directors nominated by AMCs on board of brokerage subsidiary
Asset Management Companies are permitted to nominate employees as non-executive directors on the board of a brokerage subsidiary, provided they obtain prior approval for the subsidiary's corporate structure and board composition from the Securities and Exchange Commission of Pakistan. The subsidiary must maintain at least one-third independent directors, prohibit proprietary trading, and implement strict Chinese Wall policies, segregation of front and back office systems, and best execution protocols. Nominated employees are restricted to receiving only board meeting fees, while Investment Committee members are ineligible for directorship, and the subsidiary's CEO, research heads, and traders must remain independent of the AMC. Additionally, brokerage commissions cannot exceed the minimum prescribed by the Pakistan Stock Exchange, and both entities must conduct special monitoring with quarterly reporting to their respective boards.