SECP issues Central Depositories Regulations 2015
ISLAMABAD: In line with its efforts to strengthen the capital market and as part of subsidiary legislation under the Securities Act, 2015 (the “Act”), the Securities and Exchange Commission of Pakistan (SECP) has issued draft Central Depositories (Licensing and Operations) Regulations, 2015.
The SECP has published the said regulations in the official gazette and also placed the same on its website (www.secp.gov.pk) for eliciting public comments. The regulations have also been disseminated to various prominent stakeholders for consultation purposes. Comments received on the regulations within fifteen days of issuance of these regulations, would be considered and evaluated.
In compliance with the requirements of the act, the draft 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 central depository.
Under the draft regulations, the financial resource requirements for a central depository company is proposed to be enhanced to an adequate level, given the critical functions being performed by a depository. For good governance, shareholding criteria has been specified for a central depository besides requiring the depository to appoint one- third independent directors on its board.
Among other requirements, the depository is being made responsible to have adequate arrangements for protecting the rights of beneficial owners of securities and for resolving disputes and redressal of grievances of CDS elements, beneficial owners of securities and customers. An appropriate monitoring, inspection and enforcement mechanism for CDS elements is also required to be implemented by the central depository under the said regulations. Also segregation of core and non-core businesses has been ensured through the subject regulations.