SECP approves paper on margin trading 16 September 2010Karachi Reporter: Ben Wilkie
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The Securities and Exchange Commission of Pakistan has approved the final concept paper on the proposed leverage product margin trading system.
The paper had been amended following concerns expressed by the chairman of the Karachi Stock Exchange, but was approved by the board chaired by finance secretary Salman Siddique.
Speaking to PakTribune, one insider said: "As the concept paper is finalised, the rules for the leverage product would be formulated by the independent committee constituted by the SECP, the very time that prepared the concept paper."
There are still a number of stages to go before the system can be introduced. The formulation of the rules surrounding its usage is expected to take about a month, which then need to be approved by the Commission. Final sign-off will come from the Law Ministry.
"The product cannot be in place before two months, as the Law Ministry would give the final nod," sources in the SECP said.
Trading activity in Karachi has declined in recent months, and the Commission hopes that the introduction of the system will stimulate growth.
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