REGULATIONS GOVERNING MEMBERS EXPOSURE

PREAMBLE:

 WHEREAS as the process of considering various aspects of the risk management of the members of Clearing House, it is deemed necessary that a suitable regulation for members’ exposure is desirable in order to protect the interest of all concerned. Now therefore the Board of Directors of the Islamabad Stock Exchange (Guarantee) Limited with the prior approval of the Corporate Law Authority hereby make these Regulations which shall be deemed to come into effect at once.

 1.                 Short Title:

 These Regulations may be called “The Regulations Governing Members Exposure” of the Islamabad Stock Exchange (Guarantee) Limited.

2.                 Definitions:

 In these Regulations, unless there is any thing repugnant in the subject or context:

i.                    “Exposure” means “ the amount of purchases and sales effected by a Member during the clearing period added together after allowing netting off of common scrips’ sales and purchases”.

ii.                  “Loss” means “ amount payable by the Member to the Clearing House due to difference in purchase and sale prices or difference between transaction price and market price in case of outstanding transactions of any one or more scrips at any moment of time during the clearing period”.

iii.                 “Prescribed” means “prescribed by the Board of Directors of the Exchange from time to time”.

3.                 Exposure Limits:

i.                    If at any time during a clearing period, the exposure of the Member exceeds the limit prescribed for this purpose, such Member shall deposit with the Clearing House the amount computed in accordance with the prescribed rates within 24 hours of demand.

ii.                  In case a Member sustains loss during any particular clearing period in excess of the limit prescribed for this purpose, such Member shall deposit with the Clearing House the amount of such loss within 24 hours of the demand.

iii.                 No Member shall have outstanding transactions in his account of more than the prescribed percentage of the number of the issued shares of a particular scrip in a particular clearing period.

Explanation: Deposit may be given either in cash or in the form of readily realisable securities as may be prescribed.