Pakistan's Market Regulations
What this domain tests
PMR tests whether you know which body regulates which activity in Pakistan's capital market, and what a licensed securities broker must do to stay compliant. The statutory spine is the Securities Act 2015 (broker licensing, market abuse, exchange recognition), the Companies Act 2017 (listed-company governance and disclosure), the Central Depositories Act 1997 and the Futures Trading Act 2016 (derivatives).
Who does what
- SECP - the statutory regulator: licenses securities brokers, approves exchange regulations and new products, and enforces prohibitions on insider trading and market manipulation.
- PSX - frontline regulator and market operator: listing, trading, surveillance and member discipline under the PSX Rule Book.
- NCCPL - clearing house and central counterparty: trade confirmation, T+2 settlement, margin and risk management, and the Unique Identification Number (UIN) register.
- CDC - depository: book-entry custody via investor accounts and sub-accounts, pledges and lien marking.
- SBP - banking, FX and the Special Convertible Rupee Account (SCRA) route for foreign portfolio money.
Worked example
A foreign fund wants to buy PSX shares. It does not need prior SBP approval for portfolio investment: it opens an SCRA, obtains a UIN through NCCPL via its broker, and trades through a licensed broker. Sale proceeds and dividends are repatriable through the SCRA, net of tax deducted at source. Reasoning: the SCRA is the regulated channel that lets SBP monitor inflows and repatriation while portfolio capital stays freely movable.
Traps that cost marks
- Naming PSX where SECP holds the statutory power (licensing, enforcement), or vice versa.
- Treating CDC as the clearer - settlement, margin and counterparty risk sit with NCCPL.
- Quoting memorised tax rates or filing deadlines: Finance Acts and SECP notifications revise them, so state the mechanism (e.g. withholding at source, holding-period slabs) rather than a stale number.
- Assuming client financing is allowed ad hoc - broker-funded positions must run through an approved product such as NCCPL's Margin Financing System.