In a move to boost trading activities at the local bourse, some key decisions were taken at a meeting between top officials of Securities and Exchange Commission of Pakistan (SECP) and Karachi Stock Exchange (KSE).
The meeting was held at KSE here on Thursday. The SECP team led by its Chairman Muhammad Ali met the KSE board of directors and senior members. Chairman KSE Munir Kamal, Managing Director Nadeem Naqvi, all directors, senior members including Arif Habib, Aqeel Karim Dhedhi, Feroz Kassem and others attended the meeting.
During the seven hour long meeting, the issue of continuously declining trading activities at the local bourse was discussed in details. The number one item of the agenda of the meeting was "Why are market volumes still dry: How to revive MTS and how to ensure a successful SLB product?"
Sources told Business Recorder that the meeting took some key decisions to boost trading activities at the local bourse and it was decided in principle that intra-day short selling would be allowed and future roll over window would be provided. The roll-over of futures will be allowed by paying the cost of fund. Presently, it has to be roll over by buying and selling of futures.
It was also decided that shares which are restricted in MTS financing will also be available for pledging purpose.
The meeting also decided that a system will be in place to discourage in-house financing at the local bourse.
It was also decided that there would be no exposure margin from brokers for shares worth Rs 50 million.
The meeting also discussed and deliberated all matters of mutual interest for the development of capital market and some market related pending issues.
The meeting discussed the most important issue of declining trading volumes at the bourse. It was also discussed that how to revive the margin trading system (MTS) and how to ensure a successful Securities Lending and Borrowing (SLB) product.
The function of National Clearing Company of Pakistan Limited (NCCPL) as a Central Counter Party (Establishment of Settlement Guarantee Fund and Shifting of RMS) was also discussed at the meeting.
Some other matters including Development of Derivative Segment, Development of Debt Market, Establishment of a Bond Pricing Agency, Revised Regulatory Regime for Credit Rating Agency, Enhancement of per default contribution from IPF, SME Counter/Exchange and Inter Exchange Trades were also discussed at the meeting.
The meeting also discussed the matter of establishment of Securities Investor Protection Corporation, Investor protection (Trade confirmations by stock exchanges), Activation of ETFs and Options, Introduction of Islamic Products and Shariah-Compliant Investment Alternatives, Utilisation of CHPF for Intra-day Margins, strengthening of surveillance capacity of the stock exchanges and introduction of SPAN Margins, Implementation of the Investor Education Plan, Image building, Integration of Stock Exchanges/Demutualization Matters, Implementation of effective inspection plan, Broker to broker trading on the same Exchange, Back Office Software and the matter that Internet Software to be provided by KSE to its members was also discussed at the meeting.
A senior member told that the above mentioned points were just discussed and the SECP will take final decision after internal consultation.
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