Commodity Brokers Certification
The Commodity Brokers Certification (CBC) domain tests the operating rules a broker applies on Pakistan's regulated commodity futures market, traded on Pakistan Mercantile Exchange (PMEX) under SECP oversight and framed by the Futures Trading Act, 2016: licensing, onboarding, margin, order handling, clearing and conduct.
Licensing and status
Only an admitted exchange member holding current certification and meeting fit-and-proper criteria (capital, qualification, no disqualification) may solicit or execute client orders. The broker is an agent, not a principal: proprietary orders are separately identified and never crossed with client orders; client-facing staff must be certified.
Onboarding and client money
Before the first order: signed client agreement and risk disclosure; KYC/CDD on identity, beneficial owner and source of funds, refreshed for higher-risk clients. Client money sits in segregated accounts, never commingled with the firm's; payouts go only to the client's verified own account - no cash, no third parties. Suspicious activity is reported to the Financial Monitoring Unit.
Margin and mark-to-market
Initial margin is collected before the order is accepted; positions are marked to market at least daily, debiting losses and crediting profits. If equity falls below the maintenance level, a margin call issues with a stated deadline; unmet calls mean the broker must close positions. Brokers cannot waive margin, extend unapproved credit, or fund one client's margin from another client's money.
Order handling
Capture time, quantity, price and order type; route to the exchange; no front-running, trading ahead or off-market pre-arranged offsets. Discretion requires a written mandate, and confirmations plus periodic statements are mandatory.
Worked example
A client deposits PKR 500,000; initial margin is 60,000 per lot. She buys two lots, blocking 120,000 and leaving free equity of 380,000. Maintenance is 80% of initial, i.e. 96,000. A loss of 410,000 leaves equity of 90,000 - below 96,000 - so a call issues for 30,000 to restore 120,000. If unpaid by the deadline, the broker liquidates enough to restore compliance.
Traps
Commingling client and firm funds; paying a third party; accepting an order before the agreement is signed; treating a margin call as advisory; promising returns, which is prohibited; assuming every PMEX contract ends in physical delivery - most are cash-settled.