KARACHI: The country’s first Collateral Management Company (CMC) is set to be operational by the first quarter of next year.

A spokesman for the Securities and Exchange Commission of Pakistan (SECP) said that Finance Adviser Abdul Hafeez Shaikh had recently emphasised the need to introduce formal commodity management and Warehouse Receipt Financing System (WRFS), which he had pointed out was essential to address the issue of post-harvest losses and enhance the farmers’ access to agricultural credit.

SECP Chairman Aamir Khan held a meeting on Friday with various stakeholders including the State Bank of Pakistan, Pakistan Mercantile Exchange Ltd, warehousing companies, Pakistan Agriculture Coalition (PAC) — a farmers’ body and Central Depository Company to deliberate on issues prior to the start of operations by the first collateral company in Pakistan.

Representatives of International Finance Corporation (IFC) also participated via web conferencing. The meeting was meant to begin work on ‘collateral management companies’ regulations, 2019” issued in July this year.

A public limited company with an equity of Rs200m or higher would be eligible to seek permission of SECP to register as a collateral.

The spokesman for the apex regulatory body said that it was a major step in the way towards the collateral management ecosystem — already prevalent in most markets.

Published in Dawn, September 14th, 2019