Unlisted term finance certificates: SECP approves reporting of trades

As part of the Securities and Exchange Commission of Pakistan (SECP) efforts to promote the debt capital market in Pakistan, amendments have been approved to the regulations of National Clearing Company of Pakistan Limited (NCCPL), providing for electronic reporting of trades executed in unlisted term finance certificates (TFCs).
The NCCPL reporting platform will be operational next month and all financial institutions, mutual funds, brokers and other corporate bodies will be able to report their trades through this functionality.
Unlisted TFCs represent a major portion of the corporate debt market in the country. Hence the development of a centralised platform providing access to real-time trading information in these securities was vital. This will not only provide market participants with transparent and accurate trading information but will also assist in the price discovery process.
The trades reported through this platform will also be disseminated to the stock exchanges and displayed on their websites to provide the debt market participants with a holistic view of the local corporate debt market and its trading activities. Efforts are also underway for introducing clearing and settlement of these unlisted TFCs through the NCCPL which will facilitate investors in settling their transactions and provide the debt market segment with necessary infrastructural support.
The SECP has advised the NCCPL to disseminate the concept paper on the above reporting platform to all of its clearing members and conduct training sessions and workshops to create awareness among market participants. Going forward, in order to ensure completeness of trading data being reported, amendments will also be made to the regulations of the Central Depository Company whereby movements of TFCs in the CDC on account of trading activity will only be allowed if these trades are reported through the NCCPL platform.
Recently, the SECP introduced significant improvements to the Bonds Automated Trading System of the stock exchanges with an aim to provide market with a modern and flexible trading system for listed debt securities. The above initiative is another milestone achievement as part of the SECP's roadmap for development of debt capital market.-PR