IFMP Pakistan's Market Regulations Certification (PMR), Pakistan flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

SECP

The Securities and Exchange Commission of Pakistan, the statutory regulator of the securities market, established under the SECP Act, 1997, and administering the Securities Act, 2015.

Securities Act, 2015

Pakistan's principal securities statute, replacing the 1969 Ordinance; it governs public offers, disclosure, insider trading, market manipulation, intermediaries, and takeovers.

Price-sensitive information

Information not generally available that, if published, would likely materially affect a security's price; trading on it by connected persons constitutes insider trading.

Connected person

A person with a special relationship to an issuer, such as a director, substantial shareholder, or employee, who is presumed to have access to unpublished price-sensitive information.

Market manipulation

Conduct creating a false or misleading appearance of trading, including wash trades, matched orders, price rigging, and spreading false information to move prices.

Mandatory takeover offer

Rule requiring a person acquiring 30% or more of a listed company's voting shares to make a public offer to remaining shareholders at the prescribed price.

Central Depositories Act, 1997

The statute enabling book-entry holding and transfer of securities in Pakistan; the Central Depository Company (CDC) operates the depository under it.

Front-running

An intermediary trading ahead of a known client order to profit from the expected price impact; it is a prohibited market abuse practice.

Securities broker registration

A broker must be registered with the SECP and be a member of a licensed exchange, meeting capital, record-keeping, and conduct requirements.

Client asset segregation

Requirement that brokers hold client money and securities separately from firm assets, preventing commingling and protecting clients on insolvency.

AML/CFT obligations

Under the AML Act, 2010 and SECP regulations, brokers must perform customer due diligence, monitor transactions, and report suspicious transactions to the FMU.

T+2 settlement

Standard PSX settlement cycle in which trades settle two business days after execution, cleared through NCCPL acting as central counterparty.

NCCPL

The National Clearing Company of Pakistan Limited, which clears and settles PSX trades, acts as central counterparty, and manages the clearing house protection fund.

Investor protection fund

A fund maintained through the exchange to compensate investors for losses caused by broker default or misappropriation, subject to prescribed limits.

Code of Corporate Governance

SECP regulations for listed companies requiring independent directors, an audit committee, and approval procedures for related-party transactions.

SECP enforcement powers

Tools including show-cause notices, investigations, cease-and-desist directions, monetary penalties, suspension of registration, and director disqualification.

Continuous disclosure

Listed companies must promptly disclose material events likely to affect share price, including board changes, dividends, defaults, and material contracts.

Quarterly accounts deadline

Listed companies must publish quarterly accounts within 30 days of the quarter's end, as prescribed by SECP and exchange reporting regulations.

Annual accounts deadline

Listed companies must publish audited annual accounts within 120 days of the financial year end and circulate the annual report to shareholders.

Closed period

A window before results announcements during which directors and connected persons are barred from dealing in the company's securities.

Directors' shareholding report

Directors and substantial shareholders must notify the company and exchange of changes in their holdings, which are then disclosed to the market.

Related-party transaction

A transaction between a listed company and a connected party; it requires audit committee review, disclosure, and sometimes shareholder approval.

Record retention

Regulated persons must keep books, client records, and communications for the period prescribed by SECP regulations and produce them on demand.

Companies Act, 2017

Pakistan's company law governing incorporation, directors' duties, shareholder meetings, and statutory filings with the SECP for public and private companies.

Futures Market Act, 2016

The statute governing derivatives and futures trading in Pakistan, administered by the SECP, which licenses futures brokers and approves contract specifications.

Collective investment scheme

A pooled investment vehicle such as a mutual fund, governed by SECP regulations requiring a licensed asset manager and an independent licensed trustee.

Mutual fund NAV

Net asset value per unit, calculated and published daily, representing scheme assets minus liabilities divided by units outstanding.

SCRA

Special Convertible Rupee Account, the SBP-regulated account through which foreign portfolio investors bring in and repatriate capital invested in listed securities.

Sukuk

A shariah-compliant investment certificate representing ownership in an underlying asset or project, requiring a Shariah advisor under SECP governance rules.

Deliverable futures

SECP-approved derivative contracts on eligible securities with prescribed margins, used for hedging and leveraged exposure on PSX.

Fiduciary duty

A broker or adviser must act in the client's best interest, disclose conflicts and remuneration, and recommend only suitable products.

Personal account dealing

Employees of regulated firms must obtain prior approval for personal trades and are restricted around client orders and price-sensitive information.