November 04, 2006	Saturday	Shawwal 11, 1427

ISLAMABAD, Nov 3: The Securities and Exchange Commission of Pakistan (SECP) is ready to present the much-awaited interim report of the forensic investigations into the March 2005 crash of Karachi Stock Exchange (KSE) before the National Assembly standing committee on finance.

“We are ready to present the interim report of forensic investigations to the standing committee as soon as it meets, SECP chairman Raziur Rehman said while speaking at a press conference here on Friday.

He refused to reveal anything about the findings of the report to the media at this stage when asked whether the US forensic investigators had fixed responsibility on brokers or institutions.

“We have not rolled back the new Risk Management System but have only extended the deadline for its implementation in consultation with all the stakeholders to make it more effective,” Mr Rehman said while briefing newsmen on the Thursday’s meeting with brokers in which the SECP decided to extend the implementation deadline of the new risk management regime to Dec 4, 2006 from Nov 6, 2006.

The reform process in the capital market would continue to be enforced. We have no other option but to introduce the risk management regime, he added. At no stage, the reform process was rolled back in the past and would never happen so in future, he stressed.

The chairman admitted that the present reform process could not be timely implemented as the present system of Karachi Stock Exchange (KSE) was not ready for such speedy reforms and there was need for more awareness and capacity building.

Unlike many market experts who think that the one month extra time given by the SECP would not help the exchanges create awareness about the new system or implement it that easily, Mr Rehman said that all discrepancies in the system were now being removed.

He claimed that now all the market players had agreed to get rid of in-house badla in order to efficiently run the exchanges. The SECP and stock markets management held 26 meetings on the reforms process from January this year onward to make the process more effective and participatory.

The KSE, he added, had hired Deutsche Bank as consultant for the demutualisation of the three stock exchanges. The SECP supported the demutualisation of the bourses.

Replying a question he said that there were some buyers interested in the Crescent Standard Investment Bank Ltd (CSIBL) for which the SECP had already appointed administrator after unearthing that the bank’s liabilities had exceeded its financial assets.

The SECP chairman admitted that some intending buyers had scrapped their plan, however, a local and a foreign company were still there to buy the bank.

He gave a detailed presentation about the new risk management regime. After detecting several risks and inequalities in the Continuous Funding System (CFS), the SECP came up with the idea of CFS MK II, which would adequately cover market risks associated with the current CFS system.

In order to provide a level-playing field for the Lahore and Islamabad markets it had been decided that centralised CFS MK II would be developed at the National Clearing Company of Pakistan (NCCPL). This arrangement would benefit investors as well as financiers.