June 6, 2002	Thursday	Rabi-ul-Awwal 24,1423

ISLAMABAD, June 5: Trading in commodities, whether spot or forward, does not require the approval of the Securities and Exchange Commission of Pakistan as these are not securities, it was officially clarified here on Wednesday.

Responding to some press reports, which indicate that there is some confusion in the circles concerned regarding spot and forward trading in commodities with trading in securities, an SECP statement clarified that the commission “only regulates trading in securities, which includes derivative products such as futures contracts”.

Spot trading or forward trading in commodities, it went on to state, did not require the approval of the SECP because it regulates only trading in securities. Since, however, derivative products such as futures contracts are securities, the specific approval of SECP is required as provided by the Securities and Exchange Ordinance 1969.

As regards the newly formed National Commodity Exchange Limited, it would be dealing in derivative products, mainly in futures contracts in commodities.

The SECP has, in principle, granted approval for the registration of NCEL, which will deal solely in derivative products such as futures contracts in commodities under certain terms and conditions.