PAKISTAN STOCK EXCHANGE LIMITED FOR ALL IRE CERTIFICATE HOLDERS. Mandatory Requirement for Monthly Filing of Net Capital Balance and Liquid Capital

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's PAKISTAN STOCK EXCHANGE LIMITED Stock Exchange Building, Stock Exchange Road, Karachi-74000 UAN: 111-001-122 Fax: 32437560 PSX/N - 438 TI 'gust 03, 2016 FOR ALL IRE CERTIFICATE HOLDERS Mandatory

1 's PAKISTAN STOCK EXCHANGE LIMITED Stock Exchange Building, Stock Exchange Road, Karachi UAN: Fax: PSX/N TI 'gust 03, 2016 FOR ALL IRE CERTIFICATE HOLDERS Mandatory Requirement for Monthly Filing of Net Capital Balance and Liquid Capital This is with reference to Pakistan Stock Exchange Limited (PSX) Notice # PSX/N dated July 14, 2016 whereby all market participants were informed regarding implementation of Securities Brokers (Licensing and Operations) Regulations, 2016 (the "Regulations") effective June 30, 2016 and advised to ensure compliance thereof. In this context, attention of all TRE Certificate Holders is invited to sub-clause (4) of clause 6 of the Regulations, which is reproduced hereunder: "6. Financial Resources Requirement:- (4) A securities broker shall file monthly statements of net capital balance and liquid capital with the Commission and the securities exchange computed in a manner specified in Schedule II and II/ respectively, immediately after coming into force of these regulations, and shall also submit an audited statement of net capital balance on half yearly basis. The securities broker shall start maintaining minimum liquid capital as per such amounts and/or ratios and after such period of time as may be specified by the Commission through notification. Upon such notification by the Commission, the securities broker shall be required to submit audited statement of liquid capital on half yearly basis, and the requirement to maintain net capital balance, the requirement to submit monthly statements of net capital balance and the requirement to submit half yearly audited statements of net capital balance shall be discontinued." In view thereof, all Brokers are advised to submit the net capital balance and liquid capital computed in a manner specified in Annexure A and B respectively to the Head of Operation of PSX latest by August 15, 2016 and every month thereafter latest by 1 5th day of the next month. The Regulations are available in legal framework section of PSX website at Should you require any clarification, please contact the following relevant officials of PSX: IW# Name Desi gnation & Department Location 1 Mr. Tanzeel-ul-Rehman Karachi 2 Mr. Sarmad Hussain Senior Managers - Operations Lahore 3 Mr. Asghar Abbas Nagvi Islamabad SHAF'T ALl Chief Reulatory Officer Distribution: TREC Holders of PSX based in Karachi through Karachi Office TREC Holders of PSX based in Lahore through Lahore Office TREC Holders of PSX based in Islamabad through Islamabad Office Cc: 1. The Executive Director (PRDD).SMD, SECP 5. The Chief Executive Officer, PMEX 2. The Managing Director, PSX 6. All Heads of Departments, PSX 3. The Chief Executive Officer, CDC 7. All IRE Certificate Holders of PSX 4. The Chief Executive Officer, NCCPL 8. Notice Board & Website of PSX

2 "ANNEXURE A" COMPUTATION OF NET CAPITAL BALANCE Current assets and current liabilities in relation to a securities broker for the purpose of net capital shall be determined by accounting for the current assets and liabilities in the following manner: A-Description of Current Assets Valuation basis 1. Cash in hand or in bank As per book 2. Trade Receivables Book Value less those overdue for more than fourteen days 3. Investment in listed securities in the name of broker Securities on the exposure list marked to market less 15% discount 4. Securities purchased for customers Securities purchased for the customer and held by the broker where the payment has not been received within fourteen days 5. Listed TFCs/ Corporate Bonds of not less than BBB grade assigned by a credit rating Marked to Market less 10% discount company in Pakistan 6. FIBs Marked to Market less 5% discount 7. Treasury Bill At market 8. Any other current asset specified by the Commission As per the valuation basis determined by the Commission B-Description of Current liabilities Valuation basis 1. Trade payables Book Value less those overdue for more than 30 days 2. Other liabilities As classified under the generally accepted accounting principles Guidelines issued by the Commission from time to time shall also be followed while calculating the Net Capital Balance.

3 "ANNEXURE B" Monthly statements of liquid capital with the Commission and the securities exchange NAME OF THE SECURITIES BROKER Computation of Liquid Capital As on dd.mm.yyyy # Head of Account Value in Pak Rupees Hair Cut / Adjustments Net Adjusted 1. Assets 1.1 Property & Balance Sheet Value 100% of net Nil Equipment net of depreciation 1.2 Intangible Assets Balance Sheet Value 100% of net Nil net of amortization Value 1.3 Investment in Govt. Balance Sheet Value Sale on the date on the basis of PKRV Net sale securities published by NIFT 1.4 Investment in debt Balance Sheet Value If listed than Net amount securities net of any provision i. 5% of the balance sheet in after the case of tenure upto 1 year deducting ii. 7.5% of the balance sheet, in provisions the case of tenure from 1-3 years and haircuts iii. 10% of the balance sheet, in the case of tenure of more than 3 years. If unlisted than i. 10% of the balance sheet in the case of tenure upto 1 year 12.5% of the balance sheet, in the case of tenure from 1-3 years iii. 15% of the balance sheet, in the case of tenure of more than 3 years. 1.5 Investment in equity Balance Sheet Value i. If listed 15% or VaR of each Net amount securities net of any provision securities on the cutoff date as after computed by the Securities deducting Exchange for respective securities provisions whichever is higher and haircuts ii. If_ unlisted, _1_00%_of_ carrying _ 1.6 Investment in Balance Sheet Value 100% of net Nil subsidiaries net of any provision 1.7 Investment in Balance Sheet Value i. If listed 20% or VaR of each Net amount associated net of any provision securities as computed by the after companies/underta Securities Exchange for respective deducting king securities whichever is higher provisions ii. If unlisted, 100% of net and haircuts 1.8 Statutory or Balance Sheet Value 100% of net Nil regulatory deposits/ basic deposits with exchanges, clearing house or central depository or any other entity 1.9 Margin deposits Balance Sheet Value Nil Balance with exchange and clearing house Sheet Value Deposit with Balance Sheet Value Nil Balance

4 authorized intermediary against borrowed securities under SLB 1.11 Other deposits and Balance Sheet Value 100% of carrying Nil prepayments Sheet Value 1.12 Accrued interest, Balance Sheet Value Nil Balance profit or mark-up on amounts placed with financial related parties institutions or debt securities etc. 100% in respect of markup accrued on Sheet Value loans to directors, subsidiaries and other 1.13 Dividends Balance Sheet Value Nil Balance receivables Sheet Value Amount receivable Balance Sheet Value Amount paid as purchaser under the REPO Balance against Repo agreement. Securities purchased under repo Sheet Value financing arrangement shall not be included in the investments 1.15 Receivables other Balance Sheet Value 100% of net Nil than trade receivables 1.16 Receivables from Balance Sheet Value 100% of claims other than those on Lower of net clearing house or account of entitlements against trading of balance sheet securities securities in all markets including MtM gains or exchange(s) determined through s 1.17 Receivables from Balance Sheet Value i. In case receivables are against i. Lower of customers net of provisions margin financing, the aggregate of net (i) of securities held in the balance blocked account after applying VAR sheet based Haircut, (ii) cash deposited as or collateral by the finoncee (iii) market of any securities determine deposited as collateral after d through applying VaR based haircut ii. In case receivables are against margin troding,5% of the net balance sheet ii. Net iii. In case receivables are against amount securities borrowings under SLB, the after amount paid to NCCPL as collateral deducting upon entering into contract, haircut iv. In case of other trade receivables iii. Net not more than 5 days overdue, 0% amount of the net balance sheet after V. In case of other trade receivables deducting are overdue, or 5 days or more, the haircut aggregate of (1) the market iv. Balance of securities purchased for customers sheet and held in sub-accounts after applying VAR based haircuts, (ii) v. Lower of cash deposited as collateral by the net respective customer and (iii) the balance market of securities held as sheet collateral after applying VaR or based haircuts vi. 100% haircut in the case of amount determine receivable from related parties d through

5 1.18 Cash and bank i. Bank balance - Nil Balance sheet Balances Proprietary accounts ii. Bank balance - Customer accounts iii. Cash in hand 1.19 Total Assets Balance Sheet Value Adjusted Value 2. Liabilities 2.1 Trade payables i. Payable to Nil Balance sheet exchanges and clearing house ii. Payable against leveraged market products iii. Payable to customers 2.2 Current Liabilities i. Statutory and Nil Balance sheet regulatory dues ii. Accruals and other payables iii. Short-term borrowings iv. current portion of subordinated loans V. Current portion of long-term liabilities vi. Deferred liabilities vii. Provision for bad debts viii. Provision for Taxation ix. other liabilities as per accounting principles and included in the financial statements 2.3 Non-current i. Long-term Nil Balance sheet liabilities financing ii. Staff retirement benefits iii. other liabilities as per accounting principles and included in the financial statements 2.4 Subordinated Loans 100% of Subordinated loans which fulfill the Net Balance Sheet Value conditions specified by SECP are allowed to after be deducted deducting s 2.5 Total Liabilities Adjusted Balance Sheet Value Value 3. Ranking Liabilities relating to 3.1 Concentration in Nil The amount calculated client-to-client basis Amount as margin financing by which any amount receivable from any determined

6 of the financees exceed 10% of the through aggregate of amounts receivable from total financees 3.2 Concentration in Nil The amount by which the aggregate of (i) Amount as securities lending amount deposited by the borrower with determined and borrowing NCCPL, (ii) cash margins paid and (iii) the through market of securities pledged as margins exceed the 110% of the market of shares borrowed 3.3 Net underwriting Nil (a) in the case of rights issue: if the Amount as Commitments market of securities is less than or determined equal to the subscription price, the through aggregate of (i) the 50% of Haircut multiplied by the underwriting commitments and (ii) the by which the underwriting commitment exceeds the market price of the securities. In the case of rights issue where the market price of securities is greater than the subscription price, 5% of the Haircut multiplied by the net underwriting commitment (b) in any other case: 12.5% of the net underwriting commitments 3.4 Negative equity of Nil The amount by which the total assets of the Amount as subsidiary subsidiary (excluding any amount due from determined the subsidiary) exceed the total liabilities of through the subsidiary 3.5 Foreign exchange Nil 5% of the net position in foreign currency. Amount as agreements and Net position in foreign currency means the determined foreign currency difference of total assets denominated in through positions foreign currency less total liabilities denominated in foreign currency 3.6 Amount payable Balance sheet Carrying Carrying under REPO 3.7 Repo Nil In the case of financier/ purchaser the total Amount as amount receivable under Repo less the determined 110% of the market of underlying through securities. In the case of financee/ seller the market of underlying securities after applying haircut less the total amount received, less of any securities deposited as collateral by the purchaser after applying haircut less any cash deposited by the purchaser 3.8 Concentrated Nil If the market of any security is Amount as proprietary between 25% and 51% of the total determined positions proprietary positions then 5% of the through of such security. If the market of a security exceeds 51% of the proprietary position, then 10% of the of such security 3.9 Opening Positions in Nil i. In case of customer positions, the total Āmount as futures and options margin requirements in respect of open determined positions less the amount of cash through deposited by the customer and the of securities held as collateral/ pledged with securities exchange after applying VaR haircuts ii. In case of proprietary positions, the total margin requirements in respect of

7 open positions to the extent not already met 3.10 Short sell positions Nil I. In case of customer positions, The market Amount as of shares sold short in ready determined market on behalf of customers after through increasing the same with the VaR based haircuts less the cash deposited by the customer as collateral and the of securities held as collateral after applying VAR based Haircuts ii. In case of proprietary positions, the market of shares sold short in ready market and not yet settled increased by the amount of VAR based haircut less the of securities pledged as collateral after applying haircuts 3.11 Total Ranking Total Liabilities determined amount Calculations Summary of Liquid Capital (i) Adjusted of Assets (serial number 1.19) (ii) Less: Adjusted of liabilities (serial number 2.5) (iii) Less: Total ranking liabilities (serial number 3.11) Note: Commission may issue guidelines and clarifications in respect of the treatment of any component of Liquid Capital including any modification, deletion and inclusion in the calculation of Adjusted of assets and liabilities to address any practical difficulty.

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