Recent status: KSE directed to reinstate brokerage’s trading facilities

KASB Securities will be allowed to execute ‘buy’ orders against 100% cash.

Our Correspondent December 03, 2014


The Securities and Exchange Commission of Pakistan (SECP) has directed the Karachi Stock Exchange (KSE) to reinstate trading facilities of KASB Securities in the ready market.

The reinstatement of KASB Securities’ trading facilities is subject to the deposit of necessary margins as per risk management regulations of the exchange.

KASB Securities’ trading facilities were suspended on November 18 following the imposition of a six-month moratorium on KASB Bank by the government for failing to meet capital adequacy requirements. The bank is the parent company of the brokerage house and owns a 77.1% stake in it. KASB Bank also acted as the settling bank for KASB Securities.

According to SECP Executive Director Imran Iqbal Panjwani, KASB Securities will be allowed to execute ‘buy’ orders only against 100% cash. Similarly, ‘sell’ orders will be executed only against pre-existing holdings in the Central Depository Company (CDC) sub-accounts with KASB Securities.

The SECP has also asked the KSE to appoint a dedicated, senior official to monitor daily activities of KASB Securities.

In an email to its clients on Wednesday, KASB Securities said it expected ‘restricted activity’ through its terminal on the first day of the reinstatement of its trading facilities. However, it said its clients should expect seamless trading Thursday onwards.

In order to comply with these restrictions, KASB Securities will be required to deposit 100% cash and deliver 100% securities on the date of the trade. It will execute orders on behalf of non-broker clearing members of National Clearing Company of Pakistan (NCCPL) provided that such trades are affirmed within 60 minutes of the execution to ensure the transfer of settlement obligations to the institutions concerned.

KASB Securities will be allowed to execute trades on behalf of foreign institutional investors provided that such trades are affirmed by the respective custodian clearing members of NCCPL within 24 hours of the trade execution.

“The last 15 days have been a challenge to us. We take this opportunity to extend our special thanks to the SECP, KSE, CDC and NCCPL for their impeccable support and timely resolution of this matter,” KASB Securities said in its note to clients.

Although investors were barred from using KASB Securities’ trading facilities, they could easily transfer their securities held in the sub-accounts under the brokerage’s control by following the procedures prescribed by the CDC. However, no fresh positions were allowed through KASB Securities’ trading facilities during the suspension period.

The share price of KASB Securities increased Rs0.24 on Wednesday to close at Rs6.02.

Published in The Express Tribune, December 4th, 2014.

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AbduRahman | 7 years ago | Reply

SBP must learn from SECP, SBP destroyed PAKISTAN and the reputation of Pakistan. We are working in foreign countries sending money to Pakistan. Now SBP ban on our hard cash, how we can send money to Pakistan, if SBP is supervising like this.... I hope SBP will resolve this issue next week otherwise. We OS Pakistanies will contact each other and go for next step

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