Futures Exchanges (Licensing and Operations) Regulations, 2017

Government of Pakistan
Securities and Exchange Commission of Pakistan

Islamabad, 22nd June, 2017

# NOTIFICATION

S. R.O. 547 (I)/2017. - In exercise of the powers conferred by sub-section (1) of section 114 read with sections 4, 5, 18, 20, and 95 of the Futures Market Act, 2016, the Securities and Exchange Commission of Pakistan is pleased to make the following regulations, the same having been previously published in the Official Gazette vide SRO 239(I)/2017 dated April 5, 2017, and also placed on its website as required under sub-section (4) of section 114 of the said Act, namely:

## CHAPTER I

### PRELIMINARY

**1. Short title and commencement.**
(1) These regulations shall be called the Futures Exchanges (Licensing and Operations) Regulations, 2017.
(2) They shall come into force at once.

**2. Definitions.**
(1) In these regulations, unless there is anything repugnant in the subject or context, -
(a) "Act" means the Futures Market Act, 2016 (XIV of 2016);
(b) "Ordinance" means the Companies Ordinance, 1984 (XLVII of 1984); and
(c) "Securities Act" means the Securities Act, 2015 (III of 2015); and
(d) "senior management officer" shall have the same meaning as assigned to it in clause (47) of section (2) of the Act, and also includes the following, -
(i) company secretary;
(ii) chief financial officer;
(iii) head of internal audit;
(iv) head of Information Technology (IT);
(v) head of Operations; and
(vi) chief risk officer

(2) Words and expressions used but not defined in these regulations shall have the same meaning as assigned to them in the Act, the Securities Act, the Ordinance, the Securities and Exchange Commission of Pakistan Act, 1997, the Central Depositories Act, 1997 (XIX of 1997), or any rules or regulations made thereunder.

## CHAPTER II

### LICENSING OF FUTURES EXCHANGE

**3. Application for grant of licence.**
(1) Subject to compliance with the requirements of sections 3 and 4 of the Act and these regulations, an application for grant of licence as a futures exchange shall be submitted to the Commission in Form A along with receipt evidencing payment of fee of rupees five million and the following documents, -
(a) copies of memorandum of association and articles of association;
(b) regulations made or proposed to be made under section 7 of the Act; and
(c) copies of agreements entered into by the applicant with clearing house(s) and technology partner(s), where required.

Provided that where the applicant holds licence as a securities exchange, it shall only be required to submit its regulations and list of futures contracts for approval of the Commission.

(2) The Commission, while considering the application for licence, may require the applicant to furnish such further information or clarification as it deems appropriate.

(3) The applicant shall, if so required, appear before the Commission for a representation through a person duly authorized for this purpose in writing by the board of directors of the applicant.

(4) Any subsequent change in the information provided to the Commission at the time of filing of application under this regulation or any new agreement entered into by the futures exchange in respect of matter(s) referred in clause (c) of sub-regulation (1) shall immediately be intimated to the Commission but not later than five working days from the date of such change or agreement, as the case may be.

(5) No application for grant of licence made under sub-regulation (1) above shall be refused except after giving the applicant an opportunity of being heard.

**4. Grant of Licence.**
(1) The Commission, while considering the application made under regulation 3, shall inter-alia take into account the following matters, -