KARACHI: A meeting of the board of directors of Karachi Stock Exchange was held on Tuesday, which took some important decisions in regard to market development.

Significant among them were to grant approval, in principle, for the development of trading platform and system for Government Securities (T-Bills and PIBs) through the KSE and also to approve, in principle, the ‘Concept Paper’ for creation of Small & Medium Enterprises (SME) Board.

The Concept Paper would be submitted to the Securities and Exchange Commission of Pakistan (SECP) for approval.

The KSE notified on Wednesday the other decisions taken by the board, which included the approval of Revised Terms of Reference (TOR) of Index Experts Committee of the Exchange and the ratification of proposal on ‘Proposed margin relief to members’ as deliberated by the authorised Board members/management with the representatives of SECP and submitted to the Commission for their further consideration.

The board also accorded its consent to the following new/revised Regulations and regulatory amendments, subject to the approval of SECP: (i) New Regulations to be called as “Regulatory Monitoring and Compliance of Brokers’, which would be put in place of the existing System Audit Regulations (The draft Regulations to be put up on KSE website for stock brokers consideration) and (ii) Amendments in Market Making Regulations to allow relaxation in minimum equity requirement and enhanced sharing of transaction cost (called “Laga”) by the Exchange with the market maker.

The board also decided to grant approval of Risk Management Gateway (RMG) that is being developed by KSE Information Technology (IT) Division. Also, the declaration of conflict of interest in matters to be deliberated by the Voluntary Delisting Committee by its members was suggested by the board.

The proposal to allow an additional Universal Identification Number (UIN) to each brokerage house to specifically cater to rectify erroneous trades was approved by the board.

It was also considered and decided to make a representation to FBR for appropriate treatment of tax on the income/profit being earned by the financier under Margin Financing, Margin Trading and Securities Lending & Borrowing.

In regard to the long-term investment, the board also approved proposal of listing of Term Finance Certificates (TFCs) on KSE, which were already listed on other stock exchanges, with lesser documentary requirement and payment of listing fee duly rationalised, conditional upon all future debt securities being simultaneously listed on all stock exchanges.

And finally, the board suggested ratification of amendments by SECP in Risk Management Regulations as previously approved by the board in relations to allowing individual shareholder of a brokerage house to utilise his securities for meeting shortfall in margin/ mark-to-market losses requirement of other UINs.