INVESTOR'S PROTECTION FUND
Wednesday, December 31, 2008
INVESTOR'S PROTECTION FUND Means a fund creadted by the stock exchange to protect the investors in case of default by a member.
KSE INVESTORS PROTECTION FUND REGULATIONS are as under
PREMABLE
WHEREAS the Management of Karachi Stock Exchange considers that the investors' confidence in the fair dealings at the Exchange is the key to rapid development of the market;
AND WHEREAS to ensure effective risk management in secondary market trading and to protect investors' interest in the case of a default by a member of the Exchange there is need to have necessary regulations;
NOW, THEREFORE, the Karachi Stock Exchange (Guarantee) Limited in exercise of the powers conferred by sub-section (1) of section 34 of the Securities & Exchange Ordinance, 1969 makes, with the prior approval of the Federal Government, the following regulations, namely:
1. SHORT TITLE AND COMMENCEMENT
i. These regulations rnay be called "The KSE Investors Protection Fund Regulations."
ii. These regulations shall take effect upon their publication in the official Gazette of Pakistan.
2. DEFINITIONS
In these regulations, unless the subject or context otherwise requires;
(a) “Authority” means the Corporate Law Authority;
(b) "Board" means the Board of Directors of the Exchange;
(c) "Exchange" means the Karachi Stock Exchange (Guarantee) Limited;
(d) "Fund" means the KSE Investors Protection Fund;
(e) "Investor" means a person, not being Member, his agent or representative, who has purchased or sold any of the securities listed at the Exchange;
(f) "Member" means a Member of the Exchange;
3. ESTABLISHMENT OF FUND
The fund shall be established by the Board with contributions as follows:
(a) There shall be an initial contribution of rupees twenty million by the Exchange out of the Clearing House Protection Fund;
(b) Twenty five per cent of the clearing house charges paid by the members of the Exchange would be allocated to the Fund every year until the total amount in the Fund is raised to rupees five hundred million.
Provided that on the direction of the Authority the Fund shall cease to exist upon the creation of a national fund for the protection of investors through appropriate legislation.
4. ELIGIBILITY OF CLAIMS
All claims of an investor arising out of transactions entered into as per Rules and Regulations of the Exchange and approved by the Arbitration and Advisory Committee of the Exchange would be eligible to be considered under these regulations.
5. PROCEDURE FOR SETTLEMENT OF CLAIMS
(a) In the event of default of a Member, in addition to any surplus after distribution of losses as per Members' Default and Procedure for Recovery of Losses Regulations of the Exchange, an amount up to rupees ten million shall be set aside out of the Fund to satisfy the claims of the investors against the defaulting Member.
(b) In case eligible claims of investors determined against the defaulting Member exceed the amount available for settlement such claims of investors shall be satisfied on a pro-rata basis.
6. MANAGEMENT OF THE FUND
The Management of the Fund shall vest in the Board who may regulate the same through a Committee to be constituted under these regulations to process the claims and their settlements. The Committee shall include two outside directors who shall not be members of the Exchange.
Labels: finance
posted @ 1:55 PM,
2 Comments:
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At July 27, 2011 at 6:25 PM,
Alex said...
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The main thing which I think if KSE provide the secure services so automatically clients of KSE enjoy invest in the market
Karachi Stock Exchange -
At January 16, 2015 at 3:37 PM,
Unknown said...
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