Individuals allowed to act as financier in Margin Trading System – Alfalah Securities Limited

Karachi: Individuals have been allowed to participate as a financier and lender in the Margin Trading System (MTS) from February 6, 2012 while the cash margin has also been reduced to 15% from 25%.

According to Alfalah Securities Limited, in this regard, the National Clearing Company of Pakistan (NCCPL) has announced changes in the MTS with reference to the amendments made in the Securities (Leveraged Markets and Pledging) Rules, 2011 as notified by the Securities and Exchange Commission of Pakistan (SECP). This has been done to implement the incentives for promoting Capital markets announced by the Finance Minister Dr. Abdul Hafeez Shaikh during his visit at the Karachi Stock Exchange on January 21, 2012.

The Minimum Financing Participation Ratio (FPR), which is the minimum equity participation of the Financee as a percentage of Margin Trading (MT) Transaction Value, has also been revised from 25% to 15% in cash, effective from Feb 20, 2012. The Financees will be required to deposit margins on their open position of MTS. The measures would allow more funds to be directed to the stock market thereby improving its efficiency. Furthermore, this measure along with other incentives like immunity from disclosing the source of investment applicable from April 01, 2012 is expected to bring a positive rally with better volumes in the equity market.

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