November 30, 2006	Thursday	Ziqa'ad 8, 1427

KARACHI, Nov 29: The Karachi Stock Exchange (KSE) stated in a notice issued to members on Wednesday that “a few changes had been identified to strengthen the overall implementation of Risk Management System (RMS)”.

It said that the changes ensued from a series of meetings between the KSE management and the Securities and Exchange Commission of Pakistan (SECP). The purpose was to ensure that the proposed new RMS is streamlined and ready for implementation from December 4, it added.

The following were the changes which had been approved by the KSE Board of Directors and the SECP:

(1) The implementation schedule of the new RMS (excluding client level netting) will be in a phased manner whereby 50pc of the applicable margins under the new regime will be applicable from December 4, 2006. This applies to the Ready and CFS market only. The margins would, thereafter, increase gradually by one per cent every week so that in 50 weeks’ time, 100pc margin collection level is achieved.

(2) The collection of margin at the rate of 50pc and gradual increase thereafter had been agreed by the SECP pursuant to technical constraint faced by the KSE in calculating previously announced 30pc incremental margins of members in respect of netting across settlement. The change in the margin percentage to 50pc was adopted in order to bring the level of margin collection to at least the current level for the market as a whole.

(3) In order to smoothly shift exposure from the existing regime to the new RMS, the limit of the maximum number of shares per symbol eligible as deposit against exposure is enhanced from 0.2pc and 0.05pc of the free-float, to 2pc and 0.5pc respectively as per the categories of scrips previously notified. Further, the maximum limit per scrip as a percentage of free float is increased from 30pc to 50pc for the market as a whole.

(4) For those companies where free-float details are not available, the KSE’s existing limits for acceptance of securities will be applicable until such time as the free-float figures are available.

(5) The separation of CFS market from Ready market will be implemented with effect from December 4, 2006.

(6) The companies having negative EPS will be acceptable for deposit against exposure until further notice; and

(7) List of eligible securities shall be posted on KSE website.