The Securities and Exchange Commission of Pakistan (SECP), after taking into consideration the views and suggestions of a wide range of stakeholders, finalised the concept paper on margin financing.
The SECP on Thursday announced that the concept paper has been finalised in the light of suggestions of all stakeholders including the State Bank of Pakistan, Mutual Funds Association of Pakistan, Pakistan Banks Association, Investment Banks Association of Pakistan, Leasing Association of Pakistan, Modaraba Association of Pakistan, the three stock exchanges, National Clearing Company of Pakistan Limited and the Central Depository Company.
The concept paper has been forwarded by the SECP on August 6, 2009 to the stock exchanges for their consideration, once agreed with the exchanges will initiate necessary amendments in their regulations to facilitate the implementation process. The proposed financing mechanism has been devised in line with international best practices and keeping in view the local market needs.
The SECP said that liquidity in trading is an essential requirement of any vibrant stock exchange and margin financing being a world wide, well-established financial instrument is expected to provide the needed liquidity to the country''s markets and stimulate trading activity. The proposed product will provide an easy access to the retail investors for financing against shares, it added. The SECP had announced to discontinue CFS Mk-II and Deliverable Futures products at the stock exchange from April 8, 2009.
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