The Securities and Exchange Commission of Pakistan (SECP), in line with its efforts to strengthen the capital market and as part of subsidiary legislation under the Securities Act, 2015, has approved the Clearing Houses (Licensing and Operations) Regulations, 2016.
The regulations, which have been finalised after detailed stakeholder consultation, have been placed on the SECP website.
In compliance with the requirements of the Act, the regulations provide for matters relating to licensing, minimum financial resources, duties and obligations, audit and accounts, appointment and conduct of directors and management, fit and proper criteria for directors and management and manner of outsourcing of important functions for the clearing house.
Under the regulations, initial and ongoing financial resource requirements for a clearing house, based on current and future risk evaluation of the clearing house’s operations, have been prescribed given the critical functions being performed by a clearing house.
Considering that the clearing house has recently acquired the status of a central counter party as per best international practices, various new requirements have been made applicable to the clearing house through the regulations to strengthen its new status and to meet its enhanced requirements.
This includes requirement for the clearing house to form a risk committee comprising of independent directors, key management personnel and industry experts in order to assist the clearing house in developing risk management policies and procedures.
