SECP Chairman discusses measures to promote capital Markets – Alfalah Securities Limited

Karachi, July 13, 2012 (PPI-OT): SECP Chairman along with his team has visited Karachi Stock Exchange (KSE) on 12th July, 2012 to share views on matters relating to improving efficiency and developing investment avenues in the capital markets.

According to Alfalah Securities Limited, as per the press release notified by KSE, SECP Chairman discussed measures to develop and revive volumes at the bourses. Other issues brought under discussion included development of leverage products i.e. Margin Trading (MTS) and Securities Lending and Borrowing (SLB), derivative and debt markets; effective risk management and improving market monitoring and surveillance.

SECP agreed upon taking appropriate measures to promote Intraday / day trading to increase market activity which may include granting permission to intra-day short sale in stocks. It was also agreed to take measures relating to restriction on broker to broker trading to rule out any market abuse. The authorities agreed that the inter-exchange trades will be on broker-to-broker module and the risk management with be taken care of by National Clearing Co. of Pakistan Ltd. (NCCPL).

Likewise, to promote derivative market, the system in the Deliverable Futures Contracts (DFC) will provide for a special window for DFC holders in overlapping period, where participants will be able to carry over their buy and sale positions simultaneously. It may also allow roll over of futures by paying the cost of fund; currently it has to be rolled over by buying and selling of futures. The visit aimed at improving efficiency at the bourses and enhancing investors’ confidence by increasing transparency in the operations. These measures are expected to be taken positively by the market participants together with improved volumes at the stock exchanges.