REGULATIONS
GOVERNING
ASSOCIATE
MEMBERSHIP OF ISE
CLEARING HOUSE
PREAMBLE
Whereas in order
to provide a
reasonable degree
of comfort and for
maintaining proper
risk management in
the manner of
Carry Over
Transaction (COT)
conducted by the
Non-Member banks,
financial
institutions and
companies the
Islamabad Stock
Exchange has
decided to allow
Associate
Membership of its
Clearing House to
the Non-Member
approved banking,
financial
institutions and
companies as per
criteria laid down
for the purpose.
Now, therefore, in
exercise of the
powers vested
under the Rules
and Regulations,
the Board of
Directors of
Exchange, with
prior approval of
Securities &
Exchange
Commission of
Pakistan (SECP) as
required under
Section 34(1) of
the Securities &
Exchange Ordinance
1969, makes these
Regulations which
shall be deemed to
have come into
force at once.
1) SHORT
TILTLE
These Regulations
shall be called “
Regulations
Governing
Associate
Membership of ISE
Clearing House”.
2) DEFINITIONS
In these
Regulations,
unless subject or
context otherwise
required:
(a) “Exchange”
means “ The
Islamabad Stock
Exchange
(Guarantee)
Limited”.
(b) “Board”
means “ Board of
Directors of the
Islamabad Stock
Exchange
(Guarantee)
Limited”.
(c) “Member”
means “ a Member
of Islamabad Stock
Exchange
(Guarantee)
Limited”.
(d) “Associate
Member” means “ a
Non-Member Banking
company, a
Non-Banking
Financial
Institution,
Investment
Company, Unit
Trust Scheme,
Pakistan Insurance
Corporation,
National Insurance
Corporation and
State Life
Insurance
Corporation,
admitted as a
Member of the
Clearing House of
the Exchange only
for the purpose of
executing their
deliveries and
settlement
obligations in
relation to their
COT Transactions
conducted through
a Member of the
Exchange”.
(e) “Clearing
House” means “ the
Clearing House of
the Islamabad
Stock Exchange
operating under
the Clearing House
Procedures
Manual”.
(f) “Rules
& Regulations”
means “ Rules &
Regulations
dealing with
Clearing and
Settlement,
Default and Risk
Management aspects
of the Exchange”.
(g) “ISECTS”
means “ The
Islamabad Stock
Exchange
Computerized
Trading System”.
(h) COT
Transaction” means
“ Transactions as
defined under the
Carry Over
Transactions
Regulations
executed through
ISECTS”.
3) ELIGIBILTY
FOR THE ASSOCIATE
MEMBERSHIP
The Associate
Membership of the
Clearing House
will be available
only to a
Non-Member Banking
company, a
Non-Banking
Financial
Institution,
Investment
Company, Unit
Trust Scheme,
Pakistan Insurance
Corporation,
National Insurance
Corporation and
State Life
Insurance
Corporation
subject to the
terms and
conditions as may
be laid down for
the purpose by the
Board.
4)
ADMISSION TO THE
ASSOCIATE
MEMBERSHIP
The application
for the Associate
Membership may be
made on the
prescribed
application,
attached hereto as
per Annexure “A”
alongwith an
Undertaking as per
Annexure “B”. On
completion of all
the relevant
requirements and
approval of the
Board, the
applicant will be
admitted as the
Associate Member
of the Clearing
House.
5)
PRIVILEGES ON
ADMISSION TO THE
ASSOCIATE
MEMEBRSHIP OF THE
CLEARING HOUSE
On admission to
the Associate
Membership of the
Clearing House,
the applicant will
be entitled only
to the following
privileges:
(a) The
applicant will
become an
Associate Member
of the Clearing
House of the
Exchange subject
to the Rules &
Regulations
applicable in this
behalf.
(b) The
Associate Member
shall be directly
responsible for
its clearing &
settlement
obligations with
the Clearing House
of the Exchange.
(c) The
Associate Member
shall be treated
at par with the
Members of the
Exchange in the
matter of
settlement of
their claims as
well as
distribution of
losses in the
event of default
by a Member of the
Exchange in
accordance with
the relevant Rules
& Regulations.
(d) The
Associate Member
shall not be
liable for payment
of exposures and
marked to market
differences under
the relevant Rules
&Regulations,
Clearing House
Deposit and
Service Charges (laga)
payable to the
Exchange. These
shall be the
responsibility of
the Members of the
Exchange through
whom such
Associate Member
is conducting
trading at the
stock market.
6)
OBLIGATIONS OF THE
ASSOCAITE MEMEBR
(a) The
Associate Member
will have to enter
into trades with a
Member of the
Exchange through
the ISECTS. Such
Member will be
responsible for
deposit of the
margin
requirements with
the Exchange in
accordance with
his/its
obligations
calculated on the
basis of
outstanding
business in
accordance with
the relevant rules
& Regulations.
(b) The
Associate Member
will issue its COT
obligation
payments to the
Clearing House of
the Exchange
through branches
of the banks
located in the
Exchange premises.
The Clearing House
will transfer the
shares to the COC
Account nominated
by the Associate
Member.
Conversely, when
the Associate
Member will have
to release its COT
trade it will paid
by the Clearing
House and such
Associate Member
will transfer the
shares to the
Clearing House.
(c) The
Associate Member
shall be fully
responsible for
all clearing and
settlement
obligations of all
outstanding
business in its
account maintained
with the Exchange
in accordance with
the relevant Rules
& Regulations
governing the
clearing
operations.
(d) The
Associate Member
shall not release
shares deposited
with it under the
COT transactions
for re-lending or
short selling
purposes.
7)
CHANGES IN THE
REGULATIONS
The Board may,
with the prior
approval of the
Securities &
Exchange
Commission, make
changes in these
Regulations after
giving reasonable
notice.
ANNEXURE “A”
FORM OF
APPLICATION FOR
ASSOCIATE
MEMEBERSHIP OF
CLEARING HOUSE
The Secretary
Islamabad Stock
Exchange
(Guarantee) Ltd.
Stock Exchange
Building
101-E, Anees
Plaza, Blue Area
Islamabad.
Dear Sir,
We hereby apply
for the Associate
Membership of the
Clearing House of
the Islamabad
Stock Exchange
(Guarantee)
Limited in
accordance with
the Regulations
Governing
Associate
Membership of ISE
Clearing House.
We are enclosing
herewith the
following
documents required
for the purpose:
i. Memorandum
and Articles of
Association.
ii. A
resolution adopted
by the Board of
Directors to
become Associate
Member of
the Clearing
House.
iii. A
list of the
Directors of the
company.
iv. An
Unconditional
Undertaking under
the Common Seal of
the company duly
signed on the
prescribed format.
We hereby
undertake to abide
by the Regulations
Governing
Associate
Membership of ISE
Clearing House
which are in force
or may be amended
from time to time
by the Exchange.
Yours faithfully,
_______________
Chief Executive.
ANNEXURE “B”
FORM OF
UNCONDITIONAL
UNDERTAKING
(FOR ASSOCIATE
MEMEBRSHIP OF
CLEARING HOUSE)
In
pursuance to the
Regulations
Governing
Associate
Membership of ISE
Clearing House of
the Islamabad
Stock Exchange
(Guarantee)
Limited, we
having our
registered office
at
hereby undertake
and bind ourselves
as under:
1. That we
undertake to
comply the
requirements under
the Regulations
Governing
Associate
Membership of ISE
Clearing House.
2. That we
agree to conduct
only COT
transactions
through our
associate
Membership of
Clearing House.
3. That we
understand our
Associate
Membership does
not confer any
trading rights on
the Exchange.
4. That we
undertake to
conduct all our
COT transactions
through a Member
of the Exchange
within their
approved Capital
Adequacy limits.
5. That we
undertake to
fulfill all our
obligations as
laid down under
the Regulations
viz-a-viz the
Exchange as well
as the Members of
the Exchange
through whom we
will be conducting
our day-to-day
trading operations
on the Exchange.
Yours faithfully,
Chief
Executive/Authorized
person
Common Seal of the
Company
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