KARACHI: The Borsa Istanbul has shown interest in the acquisition of 40 per cent strategic stake in the upcoming Pakistan Stock Exchange Limited (PSX), the KSE management informed the press at a briefing on the integration of the three stock exchanges into the Pakistan Stock Exchange, on Friday.

The shareholders’ approval of the three stock exchanges — Karachi, Lahore and Islamabad — and the sanction of the Securities and Exchange Commission of Pakistan (SECP) had been obtained and the formal inauguration of the Pakistan Stock Exchange (PSX) would be performed next month, possibly at the hands of Prime Minister Nawaz Sharif.

Following the establishment of PSX, the stock-brokers of the three exchanges would be the members of the integrated exchange.

Also read: ‘Merger to boost stock market’

The Trading Rights Entitlement Certificate (TREC) holders were already issued 20pc shares of the PSX while another 20pc would be offered to the general public in an Initial Public Offering (IPO).

The management recounted the advantages of integrating three separate stock exchanges into one.

Giving a background to the initiative, it was noted that the Stock Exchanges (Corporatisation, Demutualisation and Integration) Act 2012 was passed by the Parliament on March 27, 2012, and signed by the President on May 7, 2012.

Based on the above, the integration was to take place in four phases: first the Corporatisation and demutualisation; integration; separation of Real Estate and Exchange Operations and sale of 40pc equity stake to strategic investor and subsequently 20pc to public and listing on the stock exchange.

The management explained key benefits of the integrated PSX which included: approximately 400 stock brokers capable of serving investors nationwide through a single, large liquidity pool; free provision of the Exchange’s new KITS (Internet Trading Platform) to all TREC holders who sign agreement with PSX. “This will support small and medium-sized brokers to focus on business generation and sales without having to keep large infrastructure,” the management said and added that as a result, quality of service to investors would improve.”

Regulatory function as frontline regulation would be streamlined with close coordination of the SECP in terms of compliance monitoring of market participants and listed companies and finally, single stock exchange would have a nationwide footprint with SECP-supported Capital Market Hubs so that maximum people have access to the capital market.

Published in Dawn, December 12th, 2015