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WEEKLY
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| Margin financing launch soon |
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Friday, August 14, 2009
By our correspondent
KARACHI: The Securities and Exchange Commission of Pakistan (SECP) is determined to launch margin financing, a leverage product for the stock markets, before the end of August.
“The SECP is all set to launch margin financing within two weeks or before the end of August,” an SECP official told The News on Thursday.
This was disclosed with the final approval of the concept paper on margin financing by the SECP.
Before the approval of the concept paper on MF, the SECP considered views and suggestions of a wide range of stakeholders including the State Bank of Pakistan, Mutual Funds Association of Pakistan, Pakistan Banks Association, Investment Banks Association of Pakistan, Leasing Association of Pakistan, Modaraba Association of Pakistan, the three stock exchanges, National Clearing Company of Pakistan and the Central Depository Company, said a Securities and Exchange Commission of Pakistan notification.
The concept paper was forwarded by the SECP on August 6 to the stock exchanges for their consideration, once agreed with the exchanges it will initiate necessary amendments in their regulations to facilitate the implementation process.
“The proposed financing mechanism has been devised in line with international best practices and keeping in view the local market needs,” the notification read.
“Liquidity in trading is an essential requirement of any vibrant stock exchange and Margin Financing being a world wide, well-established financial instrument is expected to provide the needed liquidity to our markets and stimulate trading activity. The proposed product will provide an easy access to the retail investors for financing against shares,” the notification added.
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ISSN 1563-9479 
