SECP amends Securities and Futures Advisers Regulations

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has withdrawn the mandatory advisory licensing requirement for securities brokers after making amendments to the Securities and Futures Advisers (Licensing and Operations) Regulations, 2017, a statement said on Friday.

These regulations have been notified vide SRO No 253(I)/2018. The amendments have been notified to make advisory regulatory regime more practicable and conducive, it added.

The securities brokers have been allowed to provide securities advisory to their brokerage customers, being incidental to the conduct of their business without receiving any separate compensation thereof.

Moreover, the securities brokers have also been allowed to distribute units of mutual funds and voluntary pension funds of multiple assets management companies (AMCs), the statement said. It also said the advisory regime has been segregated into two segments, ie, advisory with portfolio management to be governed under the nonbank finance companies (NBFC) regime, whereas advisory with distribution of units of mutual funds and voluntary pension funds of multiple AMCs to be dealt under the amended Securities and Futures Advisers (Licensing and Operations) Regulations, 2017. Considering the dynamics of local capital markets, the The SECP has decided to grant licences only to corporate entities for undertaking any regulated activity in the capital markets and not to any individuals.

To help broaden the investor base, banks have been allowed to distribute units of mutual funds and voluntary pension funds of multiple AMCs, subject to certain regulatory requirements, it said.

To facilitate the existing distributors, the deadline to obtain a licence has been extended to June 30, 2018.

The rationalised licensing regime for securities brokers coupled with the SECP’s other measures would definitely contribute to reducing regulatory burden and cost of doing business for capital markets, ultimately promoting ease of doing business, it added.