The Karachi Stock Exchange (KSE) has sought approval from the Security and Exchange Commission of Pakistan (SECP) over its decision for exempting brokers’ from depositing PKR 10 mn as token money in order to become eligible for shares trading.
According to Alfalah Securities Limited, out of the token money deposit, each Broker has to add 10-40% of the deposit in order to purchase shares for its clients. A meeting is planned to be held with the members of KSE and SECP officials in order to discuss the current situation of the market and would also propose the resumption of Continuous Funding Scheme Mark-II (CFS Mk-II) against Margin Trading System (MTS), as it has squeezed the condition for money to brokers whereas, the resumption of CFS Mk-II would bode well for the market to generate turnover.
Moreover, the meeting would also address the concerns of removing Capital Gain Tax (CGT) for individual investors which has resulted in shrinking the overall market activity. Alfalah Securities Limited expects the exemption of token money deposits, if approved by the SECP, would be a major relief to stock brokers, facing severe liquidity concerns due to subdued market activity.