The Karachi Stock Exchange (KSE) has informed the members that on the recommendation of Development and Trading Affairs Committee and as approved by the Governing Board of Directors, the IT Division has completed successfully the development of a Risk Management Gateway System (RMGS) for brokerage houses.
The RMGS is currently going through rigorous 'User Acceptance Tests' (UAT) and, subject to successful outcome of these tests, the same is scheduled to be introduced by January 30, 2012, a KSE notice issued here on Monday said. The RMGS will make the trading system of the brokers more efficient, provide them systematic controls and monitoring ability over their clients' trading activities, and shall help improve general compliance of brokers for trade-related rules and regulations in following manners:
1. Members shall be able to exercise control and check their clients' orders permissible quantity and amount with respect to their margins or any other limit that may be required for risk management system of the brokerage house.
2. This will provide members the ability to control incidence of unintended "wash sale" and will help identify "blank sale" and "short sales", including enforcement of client-wise symbol restrictions and/or any other restriction that members may require to be placed on any of their specific client from risk management point of view, at order level.
"We believe that RMGS implementation will be a milestone achievement with respect to risk management and trade-related regulatory compliance of brokers that will impact positivity on investors' confidence on the system and investors' perception of the robust risk management system at the Exchange", the KSE notice said.
Since the use of RMGS is optional, at present, the members who are desirous to avail this facility are required to express their interest by sending a request letter to IT Support Services Department, as soon as possible as the installation will take place on first-come-first-served basis, it added.
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