Karachi: The National Clearing Company of Pakistan Limited (NCCPL) has issued a directive to Non-Broker Clearing Members (NBCMs) and Custodian Clearing Members (CCMs) to submit their Annual Statement of Compliance (SOC) by March 31, 2025, in accordance with NCCPL Regulations, 2015, for the financial year ending December 31, 2024.

NBCMs and CCMs are required to adhere to the guidelines outlined in Regulation 13B.10.1 of the NCCPL Regulations, 2015, and submit their SOCs within three months after the close of their financial year. The SOCs should be submitted in the prescribed format as set out in Chapter 13B of the NCCPL Regulations and Chapter 10 of the Procedures of the NCC System. The submission process is crucial for ensuring compliance with the technical, performance, and business integrity requirements mandated by the NCCPL.

Compliance with these regulations is essential for maintaining the operational standards and integrity of the clearing members. NBCMs and CCMs that have been admitted for less than a year are exempt from submitting the SOC for the financial year during which they were inducted. However, failure to comply with the submission timeline may result in disciplinary actions as per Chapter 14 of the NCCPL Regulations, 2015.

According to information available from the Pakistan Stock Exchange (PSX), the NCCPL emphasizes the importance of compliance with Regulation 4.1.7, which requires the provision of timely information regarding authorized persons, and Regulation 4.2, concerning technical performance standards. Additionally, the SOC must be signed jointly by the Compliance Officer or Chief Internal Auditor/Head of Internal Audit and the Chief Executive Officer.

For custodian clearing members, additional requirements include confirming the identification of unpaid UINs for capital gains tax (CGT) liability, maintaining evidence of CGT certificates issued to clients, and ensuring the correct usage of clients' funds and securities. Furthermore, CCMs must disclose clients' contact information, obtain written requests for UIS, and comply with risk management obligations as per the NCCPL Regulations, 2015.

Participation in the Leveraged Market also necessitates additional compliance from NBCMs and CCMs, including fulfilling the eligibility criteria and conditions prescribed under various regulations and rules for SLB, MF, MT, and MSF participants.

The NCCPL’s directive underscores the importance of adhering to these regulations to uphold the integrity and efficiency of the clearing and settlement system. Compliance ensures that the clearing members continue to meet the evolving standards and requirements of the market.