Membership of KSE is limited and fixed at 200 and prospective members have to purchase a seat from existing members. The price of the membership seat is freely negotiable between the buyers and sellers which varies according to the interaction of the forces of demand and supply. The KSE does not interfere with these transactions. However, the membership is allowed subject to fulfillment of criteria and qualification laid down by the Board.
Since June 1990, membership has been opened to corporate entities. Corporate members are required to have a minimum paid up capital of Rs. 20 million and are also subject to criteria fixed by the Board.
The Membership of KSE is also available to foreign entities provided that the Nominee Director of the company is a citizen of Pakistan.
Criteria for Individual Membership
No person shall be eligible to be admitted as Member, if:
Since June 1990, membership has been opened to corporate entities. Corporate members are required to have a minimum paid up capital of Rs. 20 million and are also subject to criteria fixed by the Board.
The Membership of KSE is also available to foreign entities provided that the Nominee Director of the company is a citizen of Pakistan.
Criteria for Individual Membership
No person shall be eligible to be admitted as Member, if:
1. He/she is less than 21 years of age;
2. He/she is not a citizen of Pakistan;
3. He/she has been adjudicated a Bankrupt; or a Receiving Order in Bankruptcy has been made against him/her, or he/she has proved to be insolvent even though he/she has obtained his/her final discharge;
4. He/she has compounded with his/her creditors, unless he/she has paid hundred paisa in the rupee;
5. He/she has been convicted of an offence involving fraud or cheating or dishonesty or any other indictable criminal offence;
6. He/she is associated with, or is a member of, or subscriber to, or shareholder or debenture holder in, or connected through a partner or employee with any other Organization, Institution, Association in Karachi where dealings in Securities are carried on;
7. He/she has been at any time expelled or declared a defaulter by any Stock Exchange or Trade Association in Pakistan;
8. He/she has been previously refused admission to the membership of any Stock Exchange unless a period of six months has elapsed from the date of such refusal;
The applicant should be an income tax or wealth tax assesses or borne as an assesses on the register of income tax/wealth tax.
The minimum qualification for an applicant for the Membership shall be "Graduation".
(In the case of a person holding at least 5 years experience of working as an agent with any of the members of the KSE or a former member of the KSE who had resigned on voluntary basis without any cause of complaint or claim, may be allowed waiver of this requirement by the Board).
The applicant should have sufficient knowledge of stock market business.
Reference from a scheduled bank in addition to other references as disclosed in the Membership form.
In the case of an active member filing his/her/their transfer application/nomination, such member shall also submit a bank guarantee or a guarantee by one of the existing members of the Exchange or a guarantee by the incoming member or any equivalent security in the manner as may be prescribed by the Exchange to the extent of Rs. 2.5 million valid for a period of 2 years from the date of transfer of membership in order to indemnify the Karachi Stock Exchange against all claims of replacement of shares received after the transfer of membership as per Rule 26(a) of Ready Delivery Contracts.
Criteria for Corporate Membership
The Corporate Body applicant for membership must;
be a company or a statuary corporation or a body corporate;
have a minimum issued and paid-up capital of Rs. 20 million.
In case of statuary corporation or a body corporate to which section 183 of the companies Ordinance 1984 applies; the membership application shall be accompanied by a "no objection" from the Federal or Provincial Government, as the case may be;
The Nominee Director representing Corporate Membership must be a citizen of Pakistan. Such nominee shall not be a member of the Exchange, nor shall be a nominee of any other Corporate Member of the Exchange.
At least two Directors of the corporate membership including the Chief Executive must have a minimum academic qualification of "Graduation".
Provided that in the case of conversion of an individual to Corporate Membership the requirement of minimum qualification for the Chief Executive shall not apply, where the same individual member continues as Chief Executive of the Corporate Membership.
(In case the Chief Executive of the Company is a member of the Exchange and the Nominee Director has the stock market experience of at least 5 years as an agent with any of the members of the Exchange may be allowed waiver of the academic qualification by the Board).
In the case of an active member filing his/her/their transfer application/ nomination, such member shall also submit a bank guarantee or a guarantee by one of the existing members of the Exchange or a guarantee by the incoming member or any equivalent security in the manner as may be prescribed by the Exchange to the extent of Rs. 2.5 million valid for a period of 2 years from the date of transfer of membership in order to indemnify the Karachi Stock Exchange against all claims of replacement of shares received after the transfer of membership as per Rule 26(a) of Ready Delivery Contracts.
The membership application shall be accompanied by an auditors certificate confirming that the company maintains a net capital balance/net assets value of at least Rs. 2,500,000/- (excluding the value of membership card).
The qualification of nominee Director shall be his holding of qualification shares in the company to the extent provided under the Articles of the nominating corporate membership.
50% of the total number of Directors subject to a minimum of two Directors of the corporate membership, including the Chief Executive and Nominee, must have a minimum academic qualification of "Graduation".
Provided that in the case of conversion of an individual to Corporate Membership the requirement of minimum qualification for the Chief Executive/Nominee shall not apply, where the same individual member continues as Chief Executive/Nominee of the Corporate Membership.
(In case the Chief Executive of the Company is a member of the Exchange and the Nominee Director has the stock market experience of at least 5 years as an agent with any of the members of the Exchange may be allowed waiver of the academic qualification by the Board).
The Chief Executive and Nominee Director must have at least 3 years stock market experience.
In case the equity of the company is subscribed by foreign participants; No Objection Certificates from State Bank of Pakistan and Ministry of Finance; is to be furnished.
NOTICE PERIOD FOR TRANSFER OF MEMBERSHIP
In relation to inactive member, who has applied for transfer of his/her/their membership; the notice period for the purpose shall be 15 days for inviting objections/claims after the issue of notice.
Provided that an active member, who has been inactive for a period of at least 2 years from the date of filing the transfer application/nomination and, has also filed a declaration to this effect, shall be treated as an inactive member for the purpose of notice period of 15 days.
In relation to active member (including those who are members of the Clearing House), the notice period for inviting objections/claims from the members shall be 90 days after the issue of notice.
Provided that in the event of an undertaking given by the incoming member (on the prescribed format) to settle all the objections/claims/liabilities of the outgoing member, the Board may even before expiry of the 90 days notice period consider and accept the membership application.
NOC OF THE CENTRAL DEPOSITORY COMPANY OF PAKISTAN LIMITED
In case the outgoing member is a participant of Central Depository Company of Pakistan Limited, he/she is required under the Regulations of CDC to notify the CDC about his/her application made to the Exchange for transfer of membership and shall also submit to the Exchange, NOC of the CDC in this behalf.
2. He/she is not a citizen of Pakistan;
3. He/she has been adjudicated a Bankrupt; or a Receiving Order in Bankruptcy has been made against him/her, or he/she has proved to be insolvent even though he/she has obtained his/her final discharge;
4. He/she has compounded with his/her creditors, unless he/she has paid hundred paisa in the rupee;
5. He/she has been convicted of an offence involving fraud or cheating or dishonesty or any other indictable criminal offence;
6. He/she is associated with, or is a member of, or subscriber to, or shareholder or debenture holder in, or connected through a partner or employee with any other Organization, Institution, Association in Karachi where dealings in Securities are carried on;
7. He/she has been at any time expelled or declared a defaulter by any Stock Exchange or Trade Association in Pakistan;
8. He/she has been previously refused admission to the membership of any Stock Exchange unless a period of six months has elapsed from the date of such refusal;
The applicant should be an income tax or wealth tax assesses or borne as an assesses on the register of income tax/wealth tax.
The minimum qualification for an applicant for the Membership shall be "Graduation".
(In the case of a person holding at least 5 years experience of working as an agent with any of the members of the KSE or a former member of the KSE who had resigned on voluntary basis without any cause of complaint or claim, may be allowed waiver of this requirement by the Board).
The applicant should have sufficient knowledge of stock market business.
Reference from a scheduled bank in addition to other references as disclosed in the Membership form.
In the case of an active member filing his/her/their transfer application/nomination, such member shall also submit a bank guarantee or a guarantee by one of the existing members of the Exchange or a guarantee by the incoming member or any equivalent security in the manner as may be prescribed by the Exchange to the extent of Rs. 2.5 million valid for a period of 2 years from the date of transfer of membership in order to indemnify the Karachi Stock Exchange against all claims of replacement of shares received after the transfer of membership as per Rule 26(a) of Ready Delivery Contracts.
Criteria for Corporate Membership
The Corporate Body applicant for membership must;
be a company or a statuary corporation or a body corporate;
have a minimum issued and paid-up capital of Rs. 20 million.
In case of statuary corporation or a body corporate to which section 183 of the companies Ordinance 1984 applies; the membership application shall be accompanied by a "no objection" from the Federal or Provincial Government, as the case may be;
The Nominee Director representing Corporate Membership must be a citizen of Pakistan. Such nominee shall not be a member of the Exchange, nor shall be a nominee of any other Corporate Member of the Exchange.
At least two Directors of the corporate membership including the Chief Executive must have a minimum academic qualification of "Graduation".
Provided that in the case of conversion of an individual to Corporate Membership the requirement of minimum qualification for the Chief Executive shall not apply, where the same individual member continues as Chief Executive of the Corporate Membership.
(In case the Chief Executive of the Company is a member of the Exchange and the Nominee Director has the stock market experience of at least 5 years as an agent with any of the members of the Exchange may be allowed waiver of the academic qualification by the Board).
In the case of an active member filing his/her/their transfer application/ nomination, such member shall also submit a bank guarantee or a guarantee by one of the existing members of the Exchange or a guarantee by the incoming member or any equivalent security in the manner as may be prescribed by the Exchange to the extent of Rs. 2.5 million valid for a period of 2 years from the date of transfer of membership in order to indemnify the Karachi Stock Exchange against all claims of replacement of shares received after the transfer of membership as per Rule 26(a) of Ready Delivery Contracts.
The membership application shall be accompanied by an auditors certificate confirming that the company maintains a net capital balance/net assets value of at least Rs. 2,500,000/- (excluding the value of membership card).
The qualification of nominee Director shall be his holding of qualification shares in the company to the extent provided under the Articles of the nominating corporate membership.
50% of the total number of Directors subject to a minimum of two Directors of the corporate membership, including the Chief Executive and Nominee, must have a minimum academic qualification of "Graduation".
Provided that in the case of conversion of an individual to Corporate Membership the requirement of minimum qualification for the Chief Executive/Nominee shall not apply, where the same individual member continues as Chief Executive/Nominee of the Corporate Membership.
(In case the Chief Executive of the Company is a member of the Exchange and the Nominee Director has the stock market experience of at least 5 years as an agent with any of the members of the Exchange may be allowed waiver of the academic qualification by the Board).
The Chief Executive and Nominee Director must have at least 3 years stock market experience.
In case the equity of the company is subscribed by foreign participants; No Objection Certificates from State Bank of Pakistan and Ministry of Finance; is to be furnished.
NOTICE PERIOD FOR TRANSFER OF MEMBERSHIP
In relation to inactive member, who has applied for transfer of his/her/their membership; the notice period for the purpose shall be 15 days for inviting objections/claims after the issue of notice.
Provided that an active member, who has been inactive for a period of at least 2 years from the date of filing the transfer application/nomination and, has also filed a declaration to this effect, shall be treated as an inactive member for the purpose of notice period of 15 days.
In relation to active member (including those who are members of the Clearing House), the notice period for inviting objections/claims from the members shall be 90 days after the issue of notice.
Provided that in the event of an undertaking given by the incoming member (on the prescribed format) to settle all the objections/claims/liabilities of the outgoing member, the Board may even before expiry of the 90 days notice period consider and accept the membership application.
NOC OF THE CENTRAL DEPOSITORY COMPANY OF PAKISTAN LIMITED
In case the outgoing member is a participant of Central Depository Company of Pakistan Limited, he/she is required under the Regulations of CDC to notify the CDC about his/her application made to the Exchange for transfer of membership and shall also submit to the Exchange, NOC of the CDC in this behalf.
