Three more stock brokers surrender licences

KARACHI: Three more stock brokers of the Pakistan Stock Exchange (PSX) have surrendered their trading licences, bringing the total to 15 following the new regulatory regime, official said.   

The official said the tougher regulations that increased the cost of doing business were the major reason behind the surrendering of trading rights entitlement certificates (TRECs). Some brokers, however, termed their dormant businesses as the main factor.  

The Pakistan Stock Exchange (PSX) management, in a notice issued over the weekend, named the brokerages which gave up trading rights as: Mashhadi Securities (Private) Limited, SIS Securities (Private) Limited and Malik Securities (Private) Limited. 

A top broker said at least 40 more will soon jump on the bandwagon as it has been difficult to meet the regulations.

An analyst, who did not want to be named, said some of these brokers were previously inactive brokers. 

After Pakistan Stock Exchange’s de-mutualization, value of the membership card – trading rights entitlement certificates – came down to zero from as much as Rs130 million back in 2008.

Recently, the Pakistan Stock Exchange auctioned two membership certificates twice with advertisement in the newspapers, but it did not receive any bid.

The reason is, of course, tougher regulations, said an official.

Exit is neither a cinchiest walk.

The brokers, who want to leave, are required to deposit at least five million rupees as security deposit for the next two years. 

After de-mutualization, brokers own 40 percent, or 16 million shares of the Pakistan Stock Exchange (PSX), but even the stakes are not considered as guarantee or security deposit