The Securities and Exchange Commission of Pakistan (SECP) has placed strict conditions on the “futures exchange” while handling the money and assets of futures brokers and their customers.
The SECP has amended Futures Exchanges (Licensing and Operations) Regulations 2017 through an S.R.O. 1913 (I)/2022 issued on Wednesday.
The amended regulations revealed that the futures exchange shall open one or more designated bank accounts with a scheduled bank in Pakistan for deposit of money belonging to futures brokers and their customers in such form and manner as may be specified by the futures exchange from time to time.
The futures exchange shall not use assets belonging to futures brokers and their customers for any purpose other than as allowed under the law.
The futures exchange shall ensure that the assets belonging to futures broker or their customers shall not form part of the assets of the futures exchange for any purpose and keep records of all amounts deposited into and paid from the designated bank accounts on behalf of each futures broker and customer.
The futures exchange shall maintain record of balances of each futures broker and customer, stating name and the amount held or received for that futures broker or customer.
If unutilized funds of futures broker or their customers are held in a profit bearing bank account, pass on profit earned on these funds to the futures broker and their customers in proportion to their unutilized balance unless specified otherwise in writing by the futures broker or customer, after making contribution to the settlement guarantee fund at the rate approved by the Commission and deducting a service fee at the maximum rate approved by the Commission.
Provided that before deducting the service fee, the futures exchange currently utilizing any portion of profits on unutilized funds of futures brokers or their customers for any other purpose other than permitted shall gradually phase-out utilization of such an amount in equal proportion till June 30, 2025, SECP revised regulations concluded.
Source: Pro Pakistani