The Karachi Stock Exchange (Guarantee) Limited’s decisions taken by board of directors in its meeting held on September 08, 2011

Karachi: The following decisions were taken by the Board of Directors of Karachi Stock Exchange, in its meeting held on September 08, 2011:

1. The Board recommended the same for approval of the General Body at the 64th Annual General Meeting, proposed to be held on Monday, October 10, 2011 at 04:00 p.m.:

i. Annual audited financial statements of the Exchange for the year ended June 30, 2011, together with the Directors’ and Auditors’ Reports thereon.

ii. Appointment of auditors of the Exchange for the year ending June 30, 2012. The retiring auditors, M/s. Ernst and Young Ford Rhodes Sidat Hyder, Chartered Accountants, being eligible, have offered themselves for re-appointment.

iii. Consideration and approval of proposed amendments in the Articles of Association of the Exchange to provide for three years’ term of the Board of Directors of the Exchange against the existing term of one year and for this purpose, to consider and if thought fit, to pass, with or without modification, the Special Resolution.

2. The Board accorded in-principle approval and consequent amendments in the respective Regulations, if required, subject to further deliberation with and formal approval of SECP, with respect to the following:

i. To allow individual shareholders (including employees and Executive Directors) of corporate brokerage house to authorize utilization of their own securities for other UINs, only if they have at least 5% shareholding in case of unlisted brokerage house and 10% shareholding in case of listed brokerage house. Further, the maximum validity of such authorization will be six months with a provision of renewal, subject to agreeing by both the parties.

ii. The minimum brokerage commission shall be charged by the members to all their ‘institutional clients’ (which shall not include individuals, proprietary and members of other exchanges) shall be 0.25% of market price or 05 paisa per share, whichever is higher.

iii. Acceptance of T-Bills as collateral by the Exchange with 2.5% haircut on daily valuation.

iv. Exclusion of National Saving Bonds (NSB) from the list of margin eligible securities.

v. Proposed revised criteria for selection of margin eligible securities for Ready Market in order to increase the number of eligible securities and allowing acceptance of all DFM trading eligible securities as margin in DFM Contracts.

vi. In order to standardize the contract size of Cash-Settled Futures (CSF) Contract, it was decided that instead of ‘Contract Multiplier’ being fixed at 500 shares currently for CSF Contract, the Board was authorized to amend the said Contract Multiplier upon each review of the CSF eligible securities. Moreover, margin regime of accepting collaterals in the form of 50% each in cash/bank guarantee and eligible securities be implemented for CSF, to bring the same in line with that of Deliverable Futures.

vii. Instead of flat rate of 12.5% as prescribed in Stock Index Futures Contract (SIFC) on account of deposit against exposure, it was decided to amend such rate to be 12.5% or underlying Index VaR, if available, of the total exposure in SIFC Market.

3. To continue charging the members on account of electricity charges as per the previous rate (which included 15% service charges) as existing as on June 30, 2011 till September 30, 2011 and re-visit the matter of revision of such rates effective from October 01, 2011 in the next meeting of the Board, as actual costs have substantially increased while the charged rate is still pegged to costs as on February 2009.

4. To allow one-time relaxation of extending submission date of Net Capital Balance (NCB) Certificates as on June 30, 2011 by September 30, 2011, instead of September 15, 2011.

For more information, contact:
Karachi Stock Exchange
Tel: (92-21) 111-001122
Fax: (92-21) 3241 0825, (92-21) 3241 5136

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