ISLAMABAD, Jan 21: Securities and Exchange Commission of Pakistan is formulating suitability rules, which will make the brokers advice on investment obligatory.

Such rules, the SECP Chairman, Khalid A. Mirza, told Dawn here on Tuesday, are already in operation in several countries, particularly in Thailand, where these were the most elaborate.

Under these rules, it would be mandatory for the broker to offer only responsible advice which, in his honest opinion, is in keeping with the position of a prospective investor in terms of the amount of money he/she wants to invest and his objective, Mirza stated.

The objective of these rules, he said, was to save the small investors from avoidable loss.

He has also directed the Commission staff to see to it that the information about small investors’ rights and the risks they should avoid while conducting transactions in the stock market are prominently displayed at the brokerage houses.