The National Clearing Company of Pakistan Limited (NCCPL) has set up a module covering margin financing to meet the growing demand following reforms laid down by the Securities & Exchange Commission of Pakistan, 'live' from Monday, April 18, 2005. The NCCPL was established with the scope to develop and operate the National Clearing & Settlement System (NCSS).
NCSS was developed to replace the individual clearing houses of Pakistan's three stock exchanges by a single entity. After the successful implementation of NCSS, the company focused on newer functionalities so as to meet the needs of market players and optimise its performance.
NCSS, with its technologically advanced features such as automated Pay & Collect functionality, introduced transparency and efficiency in the clearing process. To accommodate business requirements, functionalities such as Settlement of COT & Carryover transaction released (COTR), Balance Order Netting Functionality to cater for multiple and double clearings, Implementation of Undisclosed Market and Institutional Delivery System (IDS)/Broker-to-Broker (BTB) Delivery System were also added to NCSS from time to time.
A release of the company said that catering to the recent reforms laid down by the Securities & Exchange Commission of Pakistan, whereby COT & COTR are to be phased out by Margin Financing, the Company has widened the scope of its services by adding Margin Financing Module and has promoted the functionality 'live' from Monday, April 18, 2005.
Through this function, borrowing and lending Clearing Members will be able to record their margin financing transactions in NCSS. In order to effect the transactions in NCSS, borrowing and lending Clearing Members will be required to initiate and affirm the transactions based on underlying exchange trades. Similarly, initiation and affirmation by the respective Clearing Members will be required for the reversal of the transactions in NCSS. Mark-to-market and mark-up will be handled outside NCSS.-PR
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