KARACHI, June 17: Leading commercial banks and financial institutions in Pakistan have extended their full support for the development of a margin trading mechanism in the country, a press release issued by the SECP, quoted the chairman, SECP Dr.Tariq Hassan as saying.
He was speaking at the State Bank of Pakistan office, in the presence of most leading banks and financial institutions. The SECP chief said that in Pakistan, financing against shares was not easily available to small investors through banks and financial institutions which had resulted in the development of COT/badla market.
During the meeting, the chairman SECP explained that in consultation with the SBP margin mechanism would soon be introduced. He asked banks and financial institutions to provide institutional support for margin financing for share trading.
He said the Rules would be in line with international standards and would promote retail investment by increasing purchasing power of investors and significantly reduce the systemic risk associated with COT/badla financing.
The SECP chief also visited the office of National Commodity Exchange Limited (NCEL) on Thursday. He commended the management for taking necessary steps to make NCEL operational by the end of July 2004. Dr Hassan pointed out that vigilance needs to be exercised in monitoring.
NCEL has initially been allowed to trade in future contracts of gold only. Each type of futures contracts traded on the exchange would require specific approval of the SECP.
