Securities Brokers (Licensing and Operations) Regulations 2016

# Government of Pakistan
## Securities and Exchange Commission of Pakistan

### NOTIFICATION

Islamabad, the 24th June, 2016

S.R.O. 569(I)/2016.- *** In exercise of powers conferred by sub-section (1) of section 169 read with sections 68, 69, 75, 76, 77, 78, 79, 80, 82, 84 and 151 of the Securities Act, 2015, the Securities and Exchange Commission of Pakistan hereby makes the following regulations, the same being previously published in the official Gazette vide S.R.O. 1087(I)/2015 dated November 5, 2015 and also placed on its website as required under sub-section (4) of section 169 of the said Act, namely:

## CHAPTER I
### PRELIMINARY

1. **Short title and commencement.**- (1) These regulations shall be called the Securities Brokers (Licensing and Operations) Regulations, 2016.

   (2) They shall come into force on the date of commencement of Part V of the Act.

2. **Definitions.**- (1) In these regulations, unless there is anything repugnant in the subject or context, —
   (a) “Act” means the Securities Act, 2015 (III of 2015);
   (b) “advertisement” means dissemination or conveyance of information, or an invitation or solicitation, in respect of the services that the securities broker is licensed to carry on, by any means or in any form, including by means of, —
      (i) publication in a newspaper, magazine, journal or other periodical;
      (ii) display of posters, notices, billboards, hoardings etc.;
      (iii) circulars, handbills, brochures, pamphlets, books or other documents;
      (iv) letters addressed to individuals or bodies;
      (v) photographs or cinematograph films;
      (vi) sound broadcasting, television, the Internet or other media; or
      (vii) tele-marketing and SMS marketing;

(c) “blank sale” means sale by a securities broker on its proprietary account or on customer’s account when the securities broker or customer does not own shares respectively, or the sale does not constitute a sale with pre-existing interest or is a sale without entering into an SLB contract to meet delivery obligations on the settlement date;

(d) “customer bank account” means the bank account opened by the securities broker with a scheduled bank in Pakistan wherein all customer money is deposited and maintained;

(e) “Ordinance” means the Companies Ordinance, 1984 (XLVII of 1984);

(f) “scheduled bank” has the same meaning as defined in clause (m) of Section 2 of the State Bank of Pakistan Act, 1956 (XXXII of 1956);

(g) “sale with pre-existing interest” shall mean the squaring up of:
   (i) an earlier purchase in the same settlement or in a different settlement which will settle prior to the settlement of the sale; and
   (ii) an open position in margin trading or margin financing as a financee on account of same UIN of same security.

(h) “short sale” means a sale by a securities broker, on its proprietary account or on customer’s account, where the securities broker or customer does not own shares respectively, or the sale does not constitute a sale with pre-existing interest, but the securities broker or the customer, as the case may be, has an SLB contract to meet delivery obligations on the settlement date;

(i) “securities lending and borrowing (SLB) contract” means the securities lending and borrowing contract executed through the system provided by an authorized intermediary as per the requirements of the applicable rules; and

(j) “unique identification number (UIN)” means the unique identification number issued by a clearing house to a person for trading on the securities exchange.

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

## Chapter II
### LICENSING REQUIREMENTS FOR SECURITIES BROKER