Karachi Stock Exchange (KSE) has decided to introduce a new negotiated deal reporting system (NDRS) for equity and debt market segments, with effect from November 1, 2010, to make the reporting of all off-market transactions on real time basis and more transparent.
According to KSE notice issued here Monday, presently, all off-market transactions are reported via the special interface provided to members on their NCHS terminal. The members are obliged to report to the exchange all off-market transactions before 5:00pm or in case the deal takes place after market hours they are reported next day before 5:00pm. The same gets disseminated on the following day to the market, via our daily quotations, with quantity, price and members code.
The information about these deals in many instances are price sensitive and therefore could be classified as material information that must be shared with all participants of the market in timely manner. Therefore it is felt that the reporting of these transactions be made on real time basis.
This will also facilitate reporting of trades between investment houses involving large quantity ie block trades transactions as in mergers and acquisition deals, and all off-market transactions in the debt market, including in privately placed TFCs and OTC debt market securities for QIBs.
The NDRS shall remain operative daily and follow the timing of the exchange trading & reporting time ie, from 9:15am to 5:00pm. The responsibility of completing the transaction reported on NDRS remains entirely between the transacting parties. This system shall also be able to cater for deals agreed on the telephone. Members can place a client-to-client and/or member-to-member transactions.
In the system. NDRS shall be an "off exchange" electronic trading facility that will cater for real-time completed off-market transactions indicating the transactions' volume, price and respective members' code, It does not provide automated trade executions and settlement of trades, which remain entirely on counter-party risk. All charges and taxes payable pertaining to off market transactions presently applicable shall remain in place, likewise.
To implement the new system smoothly, the existing reporting interface on members' NCHS terminals shall remain operative in parallel with new NDRS for further 15 days from November 1, 2010. Thereafter, all off-market transactions shall mandatorily be reported to the Exchange via NDRS of the exchange.
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