KARACHI: The Central Depository Company (CDC) launched Pakistan’s first professional clearing member (PCM) in collaboration with the Pakistan Stock Exchange (PSX) and the National Clearing Company of Pakistan Limited (NCCPL), a statement said on Wednesday.
The new PCM regime, launched under the regulations of the Securities and Exchange Commission of Pakistan (SECP) has been successfully implemented after the introduction of the relevant regulatory framework by the commission and capital market infrastructure entities, leading to the launch of EClear Services Limited.
The regulatory body assigned the task of implementing the concept in Pakistan to the three SROs in the capital market, i.e., CDC, PSX and NCCPL, with CDC assigned to lead the implementation as the project manager.
The SECP introduced the new broker regime under the Securities Brokers (Licensing and Operations) Regulations in 2020, categorising the securities brokers into three categories, trading and clearing, trading and self-clearing and the trading only.
By December this year, the new regime will be completely implemented and all trading only brokers will start using the services of PCM by shifting their clearing, settlement and custody functions to PCM.
Around 25 trading only brokers have signed up for its services.
PCM, which is also known internationally as the General Clearing Member (GCM), is an international practice of “Third Party Clearing” service provider, which will provides clearing and custodial services to the trading members of the exchange, who either voluntarily or by virtue of the regulatory framework are not acting as clearing members of the clearing house.
One of the major requirements for the implementation of the new broker regime is the introduction of an independent third party custodial, clearing and settlement service provider for the clearing and settlement of trades executed by the trading only brokers