04 September 2004	Saturday	18 Rajab 1425

ISLAMABAD, Sept 3: The Securities and Exchange Commission of Pakistan (SECP) and the three stock exchanges on Friday finalized a detailed time bound actions plan for the phasing out of COT/badla financing and its replacement with margin financing and futures market.

According to a press release issued here, the expected replacement of COT (Carryover Transaction) with the margin financing/futures market, which was to take place by the end of December 2004, had with the concurrence of the stakeholders and commencing from October 8, 2004.

The meeting, attended by the SECP chairman and managing directors of the three bourses, has decided that the phasing out of COT will commence from October 8, 2004 and will end by June 31, 2005.

It was further decided that in order to ensure smooth phasing out of COT/badla and its replacement by the margin financing/futures market, the number of shares available for margin financing and futures market would be suitably increased as specified in the action plan.

A number of measures were also discussed to strengthen the risk management at the stock exchanges in the meeting. Earlier this year, the SECP in consultation with the stock exchanges, their members and other stakeholders had finalized the Margin Trading Rules, 2004 to replace the COT/badla financing in order to strengthen market integrity and reduce the systemic risk.

The margin trading rules were notified on June 30, 2004. The SBP has also assured its support for the successful implementation of phasing out of COT and its replacement with margin financing and futures market. With the phasing out of COT/badla and its replacement with margin financing/futures trading, the capital market will be on a par with other international capital markets.