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KARACHI: KASB Securities Limited (KSL) was back in business on Wednesday after the Securities and Exchange Commission of Pakistan (SECP) lifted its suspension of trading facilities imposed on Nov 18.
The chief regulator said the step has been taken in response to the Karachi Stock Exchange’s (KSE) proposal to allow limited trading facilities to the KSL.
Market participants said that though the suspension has been lifted, the brokerage house was to operate in “strictly restricted, limited and controlled environment”, a fact SECP’s Commissioner for Securities Market Division, Zafar Abdullah, endorsed while talking to Dawn.
The SECP’s directive on Wednesday stated: “KSL to execute buy orders only against 100pc cash and sell orders only against pre-existing holding in CDS-subaccounts with KSL.”
Complying with those restrictions, the KASB Securities would be required to deposit 100pc cash, if net payable, and deliver 100pc securities on trade date, i.e. T+0, the regulator added.
Secondly, KSL to execute orders on behalf of non-broker clearing members of the National Clearing Company of Pakistan Limited (NCCPL) provided that such trades were affirmed within 60 minutes of execution so as to ensure transfer of settlement obligations to the institutions concerned.
Thirdly, KSL to execute trades on behalf of foreign institutional investors provided that such trades were affirmed by the respective custodian clearing members of the NCCPL within 24 hours of trade execution. The KSE was also ordered to appoint dedicated senior level official to monitor the daily activities of KSL.
Meanwhile, the KSL sent letters to customers informing that the SECP had reinstated its operations effective Dec 3. The brokerage stated that the last 15 days had posed a challenge and it appreciated the efforts of regulators and customers for their support and timely resolution of the matter.
“Since we will be consolidating our systems there will be restricted activity through our KASB Direct Trading Terminal for tomorrow,” KSL told its customers, and added that they would be able to trade as usual from Dec 4 (today).
Most market participants thought that it was too early to tell if the beleaguered brokerage house, which is among the oldest and a favoured one commanding 15pc of the local and around 20pc of the foreign business, has suffered in terms of loss of local and foreign investors’ clients and/or their confidence.
It may be recalled that the SECP had issued directives to halt the trading facilities of KSL at the KSE and Pakistan Mercantile Exchange Ltd (PMEX) from Nov 18 till further orders, saying that it was done
The SECP indefinitely suspended the trading facilities of KSL at the KSE and Pakistan Mercantile Exchange Ltd (PMEX) on Nov 18 after the State Bank imposed a six-month moratorium on KASB Bank Limited on Nov 14.
Published in Dawn December 4th , 2014
