| BPRD
Circular No.06 |
February 23, 2000 |
-
- An
Investment Bank shall institute procedures to obtain proper
identification and introduction of prospective customers
for whom accounts will be operated under these rules.
- An
Investment Bank shall execute proper agreements with its
customers for availing service under the Cash Management
Account. The Investment Bank shall have separate standard
set of agreement for customers who wish to exercise their
own discretion or who authorise an Investment Bank to
exercise discretion on their behalf. The agreement should
be for a fixed maturity period. This period should be
agreed by the customer in advance at the time of signing
the agreement.
These
agreements should invariably include a clause to the effect
that all investment out of the CMA funds shall be made
by the Investment Bank in the permissible mode of investments
entirely at customer’s risk with no recourse to the
Investment Bank, to the extent of losses incurred on such
investments.
- An
Investment Bank shall maintain individual customer-wise
records for all amounts received by it under the Cash
Management Account from its customers and for all transactions
entered into for then or on their behalf.
- Total
outstanding amount of the CMA funds accepted by an Investment
Bank form the first 2 years of its operation should not
exceed seven times of its equity. In subsequent years,
the outstanding CMA funds should not exceed ten times
of the equity of the Investment Bank. Provided that at
any given time exposure of an Investment Bank in the CMA
activity should not exceed the total assets of the investment
Bank (excluding the assets acquired out of CMA).
- MODES
OF INVESTMENT:
- All
Investment Banks shall invest the CMA funds in the following
activities:
- Shares
of Companies listed on the Stock Exchanges(s) in Pakistan.
- Debt
Instruments listed on the Stock Exchange(s) in Pakistan
carrying a minimum rating of BBB.
- Government
Securities as approved from time to time for meeting liquid
assets requirement by the NBFls as also Repo transactions
with Banks/NBFls subject to the State Bank of Pakistan’s
restrictions.
- Any
other mode which the State Bank of Pakistan may prescribe
in this regard from time to time.
|
| |
|
|