The National Clearing Company of Pakistan Limited (NCCPL) has imposed condition for the deposit of 50 percent cash margin, as per stock, to avail Continuous Funding System Mark-II (CFS Mk-II) in the eligible scrips. This was stated by officials of NCCPL in a presentation on ''CFS Mk-II'' at Karachi Stock Exchange on Friday.
They said that this 50 percent margin deposit would only be applied on the CFS mark-up rate and not on the total funded money to the finances. "CFS financiers would pool their funds for at least 90 days and if one of them withdraws it before the set timeframe then he would be charged a penalty of KIBOR rate plus four percent on the total fund which he intends to withdraw," Luqman, CEO of NCCPL said.
He said that financing to the borrowers would be provided for maximum 22 days per scrip, which he can roll over after the expiry of the period, while the rate on CFS financing to the borrowers would be determined by market forces, as it would be a mutual agreement between the financiers and financees.
This fund to borrowers would be provided via KSE member brokers, while all schedule banks, mutual funds, non-brokering finance companies (NBFCs), development financial institutions (DFIs), brokers (Corporate & Individual) and any other corporate entity (as may be approved by NCCPL Board with the consent of SECP) would the financiers, who would be pooling their funds in CFS Mk-II System, he said.
It may be mentioned here that CFS Mk-II is a newly established fund, which would provide unlimited liquidity at Karachi Stock Exchange from April 7, 2008. This new system would automatically replace the existing one ie CFS, which provides funds up to Rs 55 billion limit at present.