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KARACHI: The Securities and Exchange Commission of Pakistan (SECP) and the Karachi Stock Exchange (KSE) deliberated upon a number of issues on Tuesday, including allowing intraday short-selling to increase shares turnover at the bourse, said officials.
“We discussed in detail the idea of allowing intraday short-selling at the KSE. The final decision is, however, yet to be taken,” said a senior official of the SECP after conclusion of the meeting.
Muhammad Ali, chairman of the SECP, presided over the three-hour long meeting, which was attended by Nadeem Naqvi, managing director of the KSE, Haroon Askari, deputy managing director of the KSE, board of directors and senior members of the exchange.
“We are going back and would see whether the decision of allowing intraday short-selling at bourses would be suitable or not,” said official.
A senior official at the KSE expressed the hope that the SECP will allow intraday short-selling in the future. He, however, said that he would avoid giving a timeline in this regard. “The KSE has to make some changes in its IT system to allow intraday short-selling, and the issue has been referred to the IT Department for possible changes and upgradation.”
A senior broker at the KSE, who also attended the meeting, said that short-selling would help increase trading activities.
“The practice across the world is that investors do short-selling. Anyhow, we have to see the dynamics and parameters of our own markets before we allow or not such selling.”
The KSE official said that the exchange has increased brokers’ trading limit by Rs50 million with effect from Monday, November 12, after the SECP approved the same. However, the additional limit of Rs50 million will gradually be withdrawn in a phased manner within one-year, he said.
“The limit was increased with the aim of multiplying trading activities amid providing more and more trade opportunities to investors at the KSE.” He said that the two exchanges have also prepared the first draft of regulations for the formation of a separate Small and Medium Enterprises (SME) Exchange at the KSE. “The next step would be determining the minimum capital requirement for companies to be listed at the SME Exchange,” he said. “We are also developing strong regulations to protect the SME sector before it goes online as it remains prone to risk of losing the money.”
The SECP and the KSE also decided to constitute at least two committees to further develop equity and debt markets.
“The committee to be formed for equity market’s development would also work upon derivatives market,” the SECP official said, while the KSE official said that the committees would consist of officials of the two exchanges and experts and professionals from the market.
“We discussed in detail the idea of allowing intraday short-selling at the KSE. The final decision is, however, yet to be taken,” said a senior official of the SECP after conclusion of the meeting.
Muhammad Ali, chairman of the SECP, presided over the three-hour long meeting, which was attended by Nadeem Naqvi, managing director of the KSE, Haroon Askari, deputy managing director of the KSE, board of directors and senior members of the exchange.
“We are going back and would see whether the decision of allowing intraday short-selling at bourses would be suitable or not,” said official.
A senior official at the KSE expressed the hope that the SECP will allow intraday short-selling in the future. He, however, said that he would avoid giving a timeline in this regard. “The KSE has to make some changes in its IT system to allow intraday short-selling, and the issue has been referred to the IT Department for possible changes and upgradation.”
A senior broker at the KSE, who also attended the meeting, said that short-selling would help increase trading activities.
“The practice across the world is that investors do short-selling. Anyhow, we have to see the dynamics and parameters of our own markets before we allow or not such selling.”
The KSE official said that the exchange has increased brokers’ trading limit by Rs50 million with effect from Monday, November 12, after the SECP approved the same. However, the additional limit of Rs50 million will gradually be withdrawn in a phased manner within one-year, he said.
“The limit was increased with the aim of multiplying trading activities amid providing more and more trade opportunities to investors at the KSE.” He said that the two exchanges have also prepared the first draft of regulations for the formation of a separate Small and Medium Enterprises (SME) Exchange at the KSE. “The next step would be determining the minimum capital requirement for companies to be listed at the SME Exchange,” he said. “We are also developing strong regulations to protect the SME sector before it goes online as it remains prone to risk of losing the money.”
The SECP and the KSE also decided to constitute at least two committees to further develop equity and debt markets.
“The committee to be formed for equity market’s development would also work upon derivatives market,” the SECP official said, while the KSE official said that the committees would consist of officials of the two exchanges and experts and professionals from the market.
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