KARACHI, Sept 17: The Securities and Exchange Commission of Pakistan (SECP) has approved the eligibility criteria for futures market with a condition to incorporate a sub-section , binding the stock exchanges to seek pre-approval of the commission before inclusion of deletion in the list of eligible securities for futures market.

In a circular to the Karachi Stock Exchange, the commission accorded approval to 30 companies that would be available for futures contract for October 2004 settlement and onward, including Pakistan Petroleum Limited.

The SECP maintained that PICIC Growth Fund and BSJS Balanced Funds were included in the futures market. It observed that "This appears to be a deviation from the generally accepted practices."

The stock exchanges should ensure that the criteria for selecting companies, including Mutual Funds (in case Mutual Funds are proposed to be included) for futures market, should be based on international best practices.

It suggested that to strengthen risk management, minimizing market abuse and effectively guard against the risk inherent in the futures market, the KSE should review the existing Futures Risk Management System. -APP