The committee on CFS agreed to phase out the CFS Mk-II product from the local bourses, it is reliably learnt. The high-level committee constituted by Securities and Exchange Commission of Pakistan (SECP) met here on Saturday and reviewed the CFS Mk-II in its entirety including risk management, eligible securities and margin requirement.
The meeting was presided over by the committee head Shehzad Naqvi, CEO of the Royal Bank of Scotland (RBS). The committee representatives from the three stock exchanges, National Clearing Company of Pakistan Limited, Mutual Fund Association of Pakistan (Mufap), Pakistan Banks Association (PBA) and senior securities market professionals/stakeholders attended the meeting.
Sources told Business Recorder that the committee reviewed the CFS Mk-II and agreed to phase out this product with the approval of the apex regulator. The committee will meet again sometime next week to finalise a proposal, which would be sent to the SECP for approval.
The SECP constituted this high-powered committee on February 11, 2009 to review the CFS Mk-II in its entirety including risk management, eligible securities and margin requirements. The committee has been entrusted with the task of reviewing CFS Mk-II and its role as a leveraging product to enhance market liquidity. The committee will also recommend other leverage products in line with best international practices and submit its recommendations/report to SECP.