Chief Executive Officer and Managing Director of the Lahore Stock Exchange (G) Limited Aftab Ahmed Chaudhry has said that the investors seeking to avail leverage position in the stock market has been given relief through modification of Financing Participation Ratio (FPR) whereas previously the Finances were required to deposit 25 percent cash to carry his long Ready Market position through MTS beyond the T+2 Rolling Settlement System.
While commenting on the SECP relief package regarding amendment to Securities (Leverage Markets and Pledging) Rules, 2011, he said now the recent amendments in Securities Rules, 2011 have empowered the SECP to reduce the FPR ration in terms of mandatory cash requirement, while the remaining portion would be allowed to deposit in approved securities with the applicable haircut in order to manage the risk posed in leverage positions.
Another amendment inspiring those individuals qualifying minimum requirements would make them to be eligible as Financiers in MTS previously restricted only to the corporate bodies. He further stated that the amendments have also waived-off the mandatory condition of prescribing minimum liquidity requirement as eligible criteria for declaration of securities for trading in MTS.
This will provide the opportunity to the investors to avail leverage in enhanced number of companies. Aftab Ahmed Chaudhry valued the remarkable recent initiatives of the Regulator endeavouring to bridge the vacuum created in the stock market since 2008 crisis in terms of flight of capital from the stock market.-PR