KSE body rejects margin financing mechanism

Saturday, August 22, 2009

KARACHI- Trading Affairs Committee of the Karachi Stock Exchange (KSE) on Friday rejected the margin financing mechanism and demanded the re-launching of modified CFS MK-II leverage product. The committee, in its meeting held on Friday evening, completely refused to accept the current margin financing draft approved by the Securities and Exchange Commission of Pakistan (SECP) and formed a sub committee, comprising of 5 members, to discuss the matter with SECP commissioner Sohail Dayala on Monday (24 August). Naeem Rafi, member Trading affairs committee, while talking to The Nation said that the committee evaluated and discussed the margin financing mechanism approved by the SECP and rejected the product due to the concerns associated with the approved mechanism. We have formed a sub-committee who will discuss the matter with the commissioner of SECP and their meeting is expected on Monday , he added. There were 21 recommendations made to modify the CFS MK-II and we want the same changes in the new modified ready board leverage product. The product will be perfect if these recommendations considered by the authority , Rafi detailed. It is important to note that SECP had approved margin financing draft and market participants were highly anticipating its re-launching but now this matter is looking more complicated as the Trading affair committee of the stock exchange has refused to accept the said approved draft.

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