The Karachi Stock Exchange (KSE) has released rules and regulation pertaining to ''continuous funding system'' (CFS) started from Monday on real time basis while the limit has been reduced by nearly Rs 500 million, following consent from the management of the Exchange.
a. The system shall use previous day''s closing price of the underlined CFS scrip for determining the utilised amount under CFS in the running market on estimate basis.
b. Governing Board of Directors authorised the Management to reduce the CFS capping limits from Rs 25 billion to Rs 24.50 billion to offset the variations arising out by the usage of previous day''s closing prices while keeping the CFS capping limits.
The IT Division would start the deployment of Trader Work Stations (TWS) version 4.3.1 from Friday, December 16, 2005, after the closing session of CFS Market.
a. Netting shall not be allowed for trades carried out in CFS market as CFS Financier with T+3 Market trades in the same scrip. The system will calculate exposure separately for trades carried out in the CFS Market in a scrip as Financier by netting all unsettled CFS trades of financier (first ticket buy and second ticket sell) including open/unreleased CFS trades (second ticket sell), however, without allowing netting with T4-3 market trades and trades carried out in CFS market as Financee in the same Scrip.
b. Netting shall be allowed for trades carried out in CFS Market as CFS Financier with T+3 Market trades in the same scrip. The system will calculate exposure separately for trades carried out in CFS market in a scrip as Financier by netting all unsettled CFS trades of Financier (first ticket sell and second ticket buy) including open/unreleased CFS trades (second ticket buy) with allowing netting with T+3 market trades.
c. Exposures in a scrip calculated as CFS Financier as per (a) above and as CFS Financee/T+3 trades as per (b) above will be added together to arrive at the Exposure of the member in a CFS eligible scrip.
d. There will be no change in the existing mechanism for calculation, netting and collection of Mark-to-Market losses and the same will remain intact.

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Exposure limit of CFS financier                         Deposit payable
Up to Rs 100 million                   2 percent of the exposure amount
Over Rs 100 and up to Rs 200 million     Rs 2 million + 3percent of the
                                        amount exceeding Rs 100 million
Over 200 million and up to                      Rs 5 million +4 percent
Rs 300 million                                            of the amount
                                               Exceeding Rs 200 million
Over Rs 300 million               Rs 9 million + 5percent of the amount
                                               Exceeding Rs 300 million
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Deposit against CFS market margin slab will be accepted in CFS eligible securities only.
In terms of the decisions of the Board of Directors, a detailed presentation will be given to all market participants for revised RMS features on January 6, 2006, at 4:00 pm at KSE auditorium and shall be implemented from January 16, 2006.
It may be noted that the features except mentioned in serial numbers 5 and 6 shall come into force from December 19, 2005.