The board of directors of Karachi Stock Exchange (KSE) has decided to reduce with immediate effect, the aggregate amount of contribution from Investors' Protection Fund (IPF) from existing allowable limit of up to Rs 75 million to an amount not exceeding to Rs 25 million, in the event of default or deemed expulsion of a TREC holder (previous termed as 'member') of the Exchange, subject to approval of regulatory amendments by the Securities and Exchange Commission of Pakistan (SECP).
The KSE Board of Directors in its meeting held on October 31, took some key decisions and on the recommendation of the Audit Committee, the board approved the un-audited financial statements of the Exchange along with Directors' Review for the quarter ended September 30, and authorised to circulate the same to the members/shareholders of the Exchange.
The Board constituted/re-composed various committees and appointed members of the entire committees in certain cases and appointed chairmen of the committees in other cases, authorising them to nominate other members on their respective committees, in consultation with the Managing Director of the Exchange.
The Board approved charging of management fee to CHPE and IPF Trusts at the rate of two percent per annum of the respective fund size as at June 30 of preceding financial year, with effect from October 1, for providing services by the KSE to these Trusts in relation to finance and investment, risk management and customer services and investors' complaints.
The Board in principle agreed with the concept of providing trade confirmation to investors by the Exchange through mobile SMS. However, the Board deferred final approval pending detailed presentation of the modus operandi to members of the Board as well as awareness generation about exact procedure to all TREC holders. The list of top 25 companies entitled for award for the year 2011, as per the specified criteria in this regard was also approved by the Board. The Board also approved the Whistle Blowing Policy of the Exchange. The Board ratified the extended time period of half an hour allowed by the management for rollover functionality to execute two simultaneous Deliverable Future Contracts during overlapping period and authorised the Managing Director to take such type of actions, if the situation or emergency so justifies.
The Board approved the new-proposed web based Corporate Announcements System and relevant Capex to procure the same, to replace the existing Fax solution and in order to disseminate market sensitive information pertaining to listed companies, more efficiently and without human intervention. The Board approved the change in Index Methodology by adding in pre-inclusion criteria of KSE-30 index pertaining to liquidity, whereby the companies/securities will be eligible for KSE-30 Index, if their average Impact Cost remains equal to or less than 1.5 percent during the review period. The Board authorised the management to revise the relevant Index Manuals and implement the changes accordingly.
The Board approved to allow Negotiated Deal Market to accept reporting of Negotiated deals in a quantity, consisting of fractions over and above the multiple of marketable lots of respective securities applicable in the Ready Market, in order to accommodate blocked deals comprising of fractional shares also. The Board approved issuance of Bank Guarantees of an aggregate amount of Rs 50 million by CHPF Trust in favour of NCCPL on revolving basis, in order to provide margin relief to brokers for taking trading exposure up to Rs 50 million in Ready or Odd Lots Markets, subject to approval of Supplementary Trust Deed by relevant Trustees. The Board also agreed to implement the mechanism of margin relief effective from November 12, as against November 5, already notified to the market participants.
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