ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) approved relaxations in rules for trade in futures market to be implemented by the National Clearing Company of Pakistan Ltd (NCCPL) from next week.

Based on thorough consultation with the Capital Market Reforms Committee comprising large brokerages and other stakeholders including the Pakistan Stockbrokers Association (PSA), the NCCPL approved three main demands of the market players.

The demands include allowing investors to pledge government securities including the treasury-bills (T-bills) and bonds as collateral in lieu of cash/bank guarantee in the futures market.

The NCCPL noted that the measure will help promote investment in government securities and help manage liquidity issues for investors mainly brokers.

An SECP official said the amendments in rules are in line with the reform agenda of revitalising the capital markets. “The primary focus of these measures will enhance liquidity, ease of doing business and address practical difficulties faced by market participants,” he said.

PSA office bearer Mr Adil Ghaffar said the move will help enhance liquidity in the market. “This limitation of 50pc of profits is a better idea as releasing all profits in one go could lead to the risk of overexposure by some brokers,” he added.

Published in Dawn, March 8th, 2020