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SECP introduces Professional Clearing Member Regulations

July 6, 2020: The Securities and Exchange Commission of Pakistan (SECP) has issued draft Professional Clearing Members (PCM) Regulations, 2020 for public consultation.

Professional clearing members denotes the concept of a third party independent institution, which will offer custodial and clearing/ settlement services to securities brokers and their customers. PCM can be a financial institution, such as a commercial bank, Non-Banking Finance Company etc., or a specialized entity formed for this purpose. PCM will handle the custody and clearing/ settlement functions for brokers that will significantly reduce compliance burden, ensure efficiency in businesses and allow brokers to focus on their key competencies. The new regulations will evolve a new business model, which will support ease of doing business, and reduce operational costs.

The draft PCM Regulations lay down licensing, conduct and operational requirements for PCM which include eligibility criteria, development of important policies and procedures, measures for ensuring customer asset protection and segregation, confidentiality of customer information and compliance with corporate governance requirements etc.

Earlier, SECP had introduced the concept of categorization of securities brokers and segregation of trading and custodial/ settlement functions, whereby only those brokers which fulfill the eligibility criteria can offer custodial/ clearing services.  As per the new model, Trading Only brokers can transfer their custody/clearing services to brokers which meet significantly higher eligibility criteria and licensed as Trading and Clearing brokers.

PCM framework is a crucial milestone in implementing the new broker regime and introducing international best practices. It will mitigate the market risk and further strengthen the custody protection measures to safeguard interest of the investors.

Press Release

European stock markets rebound strongly at open

July 6, 2020: European stock markets rebounded strongly at the start of trading on Monday following a rally in Asia, driven by hopes of a swift and solid economic recovery.

London's benchmark FTSE 100 index surged 1.8 percent at 6,267.78 points, having slid by 1.3 percent Friday on profit-taking.

In the eurozone, Frankfurt's DAX 30 index jumped 1.9 percent to 12,766.05 points at the open Monday and the Paris CAC 40 won 2.0 percent to 5,109.28.

APP

Foreign investors upbeat with improved security environment – OICCI...

July 6, 2020: Overseas Investors Chamber of Commerce and Industry (OICCI), the largest chamber in terms of economic contribution and representing top 200 foreign investors in Pakistan, has released the results of its latest Annual Security survey 2020, covering feedback on the security environment from July 2019 to June 2020.

Overall, the foreign investors have shown high level of satisfaction on the fast improving security environment and have also appreciated the performance of law enforcement agencies (LEAs) in the main business centers of Pakistan, Karachi and  Lahore, raising the security satisfaction profile of the two cities and bringing them at par with other megacities in the region.

Commenting on the survey findings, Haroon Rashid, President OICCI said “the smooth and professional handling of the brazen attack on Pakistan Stock Exchange on June 29th, and restoring order within a very short time, is a testimony of the OICCI members’ confidence in the ability of the LEAs to professionally combat any threat to life and property in the country”.

The OICCI President added “foreign investors are not deterred by isolated incidences and continue to take a holistic view of the operating environment, which, OICCI members perceive to be highly positive showing continuous improvement.” 

The survey respondents included CEOs and senior management of member organizations and was participated by 70 per cent of the OICCI’s 200 members, who belong to 35 countries and operate in 14 key sectors of the economy in Pakistan. It may be noted that over two third of the OICCI members have their head offices in Karachi with operations all over country. The survey was conducted from May 15th till June 22nd.

OICCI 2020 Security Survey indicates that the foreign investors, overall, are impressed with further improvement in the security environment over the past twelve months, since July 2019, especially in Karachi and Lahore, with noticeable improvement in other business centers as well.

While giving assessment of the overall security situation, 60% of the respondents have reported improved security environment for own and Customer’s Business, as well as for their respective suppliers and employees.

Irfan Siddiqui, OICCI Vice President pointed out that “this improvement is over and above the already improved security environment last year, and the continuous improvement recorded in the OICCI members annual security surveys since 2015”. He further added that “It is highly encouraging that despite many disruptions during the past twelve months, due to Azadi March in December 2019, border tension with India during Q3 2019, and subsequent travel restriction since end March 2020 due to COVID 19, the visit of foreign nationals visiting Pakistan for OICCI members business, pre COVID 19, showed a healthy increase, as over 40 % respondents reported more visitors than last year, with 26% hosting more than 50 visitors and most respondents getting between 20 and 50 visitors”.

The foreign business visitors were mainly from China, UK, USA, UAE, as well as other European and Asian countries.

Due to the sustained improvement of the security environment, OICCI members reported that over 90% of the Board and management meetings of their Pakistan business operations, involving HQ and/or Regional Management, were held within the country.

In terms of serious crimes, 87% respondents indicated a decrease over last year in Karachi and Lahore. However, the survey respondents have expressed concern on the increasing trend of street crimes. All in all, 37% respondents in Karachi and 27% in Lahore reported concern on increasing street crimes. According to the results Islamabad experienced the lowest increase in street crimes among the key business centers.

There was also a thumbs up for the LEAs as, by and large, the foreign investors were satisfied with the performance of Law Enforcement Agencies, with over 90% expressing satisfaction in their interactions with Karachi and Lahore Police, Sindh Rangers, Punjab Police and CPLC and 84% for Sindh Police.

OICCI Security survey is very comprehensive and gives a detailed feedback of a large number of foreign investors operating in Pakistan on various aspect of doing business connected with security and its impact on their operation which is regularly sought by diplomats and security professionals.

Established in 1860, Overseas Investors Chamber of Commerce and Industry (OICCI), is the largest Chamber of Commerce in Pakistan based on economic contribution in the form of taxes and investment by its members and is the collective voice of over top 200 foreign investors in Pakistan, including over 50 Fortune 500 companies, who contribute about one third of the total tax collection in the country and a significant portion of the GDP. Coming from 35 countries and working in 14 key sectors of the economy, OICCI members are leaders not only in economic activities and investment but are also thought leaders in transfer of technology and in CSR activities.

Press Release

Working paper prepared to make Pakistan Post into Pakistan...

July 6, 2020 (MLN): Pakistan Post is all set to be made into Pakistan Post Bank to help record all cash transactions through Post office, now that all the working paper has been prepared.

The aforesaid decision transpired after the Asia Pacific raised flag on functioning of Pakistan Post operations, stating that the transaction of cash through Pakistan Office appeared to be less documented.

Hence, the creation of Pakistan Post Bank is expected to accelerate pace of remittances and track all cash transactions.

Pakistan Post Office currently has 10,500 branches, out of which 2,400 Pakistan Post Branches have not been reached by any bank so far.

Moreover, Pakistan Post Office has around 2.1 million users and 38 million account holders in Pakistan as of now. With the creation of Pakistan Post Bank, the number of users is likely to increase to 65 million by 2023.

Copyright Mettis Link News

Dawood Equities starts trading activities in commodities through PMEX

July 6, 2020 (MLN): Dawood Equities Limited has started trading activities in commodities through Pakistan Mercantile Exchange Limited and now become operational to undertake Future Broker Activity, the company announced on Monday.

Earlier in April, the company had received license from Securities and Exchange Commission of Pakistan to undertake Future Broker Activity.

Copyright Mettis Link News

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