ISLAMABAD, April 15: Chairmen of the three stock exchanges of Pakistan endorsed here on Thursday the decision of the Securities and Exchange Commission of Pakistan (SEC) to phase out the Carryover-Transactions (COT) by the end of this year.

This was one of the issues that figured in the meeting of the coordination committee of the SECP and the stock exchanges which was held at the SECP head office under chairmanship of SEC Chairman, Dr Tariq Hassan.

Before the endorsement, official spokesman said, the meeting discussed in detail the draft Margin Financing Rules, 2004, and agreed upon their provisions after the commission's officials explained the rationale underlying these.

The draft rules had been prepared by the SECP in consultation with stakeholders for the gradual phasing out of COT/ badla financing. The rules would be forwarded for vetting and issuance after appropriate deliberation over the amendments proposed by the exchanges.

The introduction of these rules, it was observed, were expected to further enhance the retail investor base as well as minimising the systemic risk posed to the market. The Chairman, SECP, appreciated the progress made by the three exchanges in the area of automated trading, particularly the increasing number of terminals placed outside the exchange premises.

It was decided during the meeting that a committee with representation from the three stock exchanges as well as the SECP would be formed to formulate regulations for web-based trading.

The meeting also discussed the progress made on the Over-the- Counter (OTC) market. It also deliberated on the possibility of a unified OTC market for the three exchanges, rather than each exchange operating its own OTC market.

The stock exchanges decided to further review this proposal, particularly in its technical aspects. The chairman, SECP, lauded the services rendered by Mr Sameer Ahmed to the Lahore Stock Exchange during his recently concluded tenure.

The meeting was attended, among others, by Mr Shahid Ghaffar, SECP commissioner; Mr Arif Habib, chairman, KSE; Mr Moin Fudda, managing director, KSE: Mr. Syed Asim Zafar, chairman, Lahore Stock Exchange; Mr Sameer Ahmed, managing director, LSE; Mr Omar Iqbal Pasha, chairman, Islamabad Stock Exchange and Mr Aftab Ahmed Chaudree, managing director, ISE.