Near, but not yet so far

Securities and Exchange Commission appears set to forward draft of Securities Bill 2010 to finance ministry.

KARACHI: The Securities and Exchange Commission of Pakistan (SECP) appears all set to forward the draft of Securities Bill 2010 to the federal finance ministry as the regulator is nearing completion of the final document.

“There is one set of rules which include margin trading, margin financing, securities lending, borrowing and pledging,” explained an SECP spokesperson, adding “these rules are being finalised.”

He added that once approved by the commission, the set of rules will be forwarded to the finance ministry.

The spokesperson also said “promulgation of the said rules will only be done after the approval of the finance ministry.”

Meanwhile, market sources asserted that contrary to what has been reported in news reports previously, the approval of the federal law ministry will not be required.

“Related laws have already been approved by the law ministry and in the new product the same laws have been included with some modifications, therefore, it is not required to be approved by the law ministry,” said InvestCap head of research Khurram Schehzad.

He added “the new product is expected to be introduced by next month after approval from the finance ministry.”

Schehzad asserted that “financing on individual basis has also been allowed through the proposed product.”

Market sources also revealed that member-directors of the Karachi Stock Exchange (KSE) have decided to pass a motion against the chairman of the KSE board. The move has been planned even though the SECP has already turned down a similar request by member-directors of the exchange at a meeting in Karachi on September 1.

At that meeting, the regulator had highlighted that non-member directors were introduced on the boards of local bourses for “efficient and impartial decision-making which is in the interests of all stakeholders, including the public at large.”

Meanwhile, brokers remain hopeful that the introduction of the leverage product will take place soon so that dwindling interest in the equity markets may be revived.

Published in The Express Tribune, October 27^th, 2010.