November 9, 2002	Saturday	Ramazan 3,1423

ISLAMABAD, Nov 8: The Consultative Group on Capital Markets has recommended the gradual phasing out of carryover trade (COT) financing and its replacement with margin financing and the futures markets over a period of time, possibly by June 30, 2003.

The plan for phasing out COT financing included various recommendations such as framing of rules for margin financing by the Securities and Exchange Commission of Pakistan (SECP) and rationalization of margin requirements for COT markets and futures market.

The plan was finalized after an in-depth discussion over the various aspects of COT financing at a meeting of the Group presided over by Khalid A. Mirza, Chairman, SECP, said an SECP press release issued here on Friday.

The Consultative Group on Capital Markets was set up earlier this year on the initiative of the SECP and is chaired by the SECP chairman. It comprises eminent practitioners from the private sector and senior regulators, and acts as an independent think-tank for important policy decisions impacting the capital market in Pakistan.

The recommended action plan involves consultation with stakeholders and giving proper advance notice to all market participants. The action plan would be considered in the SECP-stock exchanges coordination committee meeting proposed to be held in mid-December 2002.

The consultative group also deliberated on a number of other issues of pertinence to the development of the capital market in Pakistan.

A research paper on margin requirements based on price volatility commissioned by the Group and prepared by Professor Asim Jamal and Aneel Kanwer of Karachi University Business School was presented during the meeting.

It was decided that the findings would be forwarded to the stock exchanges for their review and discussed further at the forthcoming meeting of the coordination committee of the stock exchanges and the SECP.

The proposed regulations for voluntary de-listing of companies submitted by Salim Chamdia, chairman, KSE, were also reviewed by the Group.

Further recommendations were made for the buy-back of shares and Shamin Ahmed Khan was entrusted with the responsibility of finalizing the recommendations received from members of the Group.—APP