Daily Times

Securities and Exchange Commission of Pakistan (SECP) have made significant capital market reforms featuring legal, structural, regulatory, operational and product development initiatives which were helping in development of a robust and transparent capital market in the country.

“In order to enhance security of investor’s assets with the securities brokers and strengthen the overall brokerage industry, framework for a new regulatory regime has been introduced involving categorization of securities brokers according to their financial resources and governance standards,” says annual report of SECP.

Securities brokers that would comply with enhanced net worth, corporate governance and compliance requirements shall be allowed to retain custody of investor assets. Small sized brokerage houses shall not be maintaining custody of customer assets and therefore will be subject to less stringent regulatory requirements.

This would enable such brokerage houses to operate at lower costs and accordingly focus on their core competence of trading and investment advice and aid in expanding market outreach.

Minimum and maximum range of brokerage commission has been implemented for ensuring quality of brokerage service provided by securities brokers, reducing anomalies and supporting growth of the brokerage industry. In this regard, a minimum brokerage commission of 3 paisa per share or 0.15% of traded value, whichever is higher, has been made effective along with a maximum allowable commission rate of 2.5% of traded value, report said.

PSX has successfully launched two Exchange-Traded Fund’s (ETF), which will uplift investor base in the capital market by providing a new, low cost and well-diversified investment avenue for the investors.