AAJ TV : Pakistan Ki Awaz

KARACHI : The National Clearing Company of Pakistan Limited (NCCPL) has announced the launch of entire CFS Mk-II, with all CFS Mk-II eligible securities, effective from July 14, 2008 while the existing CFS market will be available by July 11, 2008.

In a notice issued here on Friday, the NCCPL announced change-over plan for existing CFS to CFS Mk-II. According to NCCPL, on the go-live date of the CFS Mk-II, all the existing non-broker CFS financier clearing members and broker CFS financier clearing members of NCCPL shall mandatory become authorised financier clearing member (AFCM) in CFS Mk-II market in terms of NCCPL regulations governing CFS Mk-II.

Existing CFS market shall be available till Friday July 11, 2008. After July 11 no further CFS contracts will be entered in the existing CFS market. However, release system (NCHS) of the existing CFS market shall be available up to the maximum of 22 working days effective from July 14, 2008.

All unreleased CFS contracts, of the existing CFS market, shall be released on their respective maturity date ie after the expiry of 22 working days. Such forced released CFS contracts shall be made available in CFS Mk-II market for further roll-over in accordance with NCCPL regulations governing CFS Mk-II. Existing CFS contract over 22 working days on July 11, 2008 shall be forced released on July 14 and similarly existing CFS contract over 22 working days on July 14 shall be forced released on July 15 and so on. However, all such forced released contracts shall also be available for roll-over in the CFS Mk-II market.

Effective from go-live date, fresh financing shall only be available in the CFS Mk-II eligible securities. All existing CFS eligible securities will also be eligible for CFS Mk-II market.

The margins on ready market purchase, held by KSE, shall be deemed to be the margin of the NCCPL on CFS Mk-II transactions once a CFS Mk-II transaction is executed in respect of such ready market purchase. Effective from go-live date, special margins from financees and mark-to market losses from financees and AFCMs shall be collected by NCCPL regulations governing CFS Mk-II market.

Pursuant to NCCPL regulations governing CFS Mk-II market, the aggregate exposure of each financee in CFS Mk-II market shall not exceed 15 times of its net capital balance. In order to comply with such requirement all financees shall be required to submit the certificate of net capital balance, along with the amount to be allocated for CFS Mk-II, to NCCPL before go-live date.

The surplus collaterals deposited by non-broker CFS financier clearing members to the NCCPL under the financial institutions risk management system may be transferred into respective CFS Mk-II contracts. Institutional delivery system (IDS) functionality of the National Clearing and Settlement System (NCSS) shall not be available for CFS Mk-II market.

The NCCPL has advised all CFS financier clearing members (prospective AFCMs) and financees to ensure availability of necessary hardware/software latest by June 30 so as to enable NCCPL to make necessary installation of the CFS Mk-II application.

Effective from the go-live date, the BCMs shall not be required to have two separate personal computers for acting as authorised financier and financee. All the CFS Mk-II transactions as authorised financier or financee shall be entered and executed from one personal computer. Moreover, 'Gateway' facility shall also be available to all market participants, effective from go-live date.

The Category 'A' securities eligible for CFS Mk-II market include Allied Bank Limited, Arif Habib Bank Limited, Arif Habib Securities Limited, Adamjee Insurance Company Limited, Askari Bank Limited, Azgard Nine Limited, Attock Refinery Limited, Bank Al Falah Limited, Bank of Punjab, Crescent Steel, DG Khan Cement Company Limited, Engro Chemicals, Faysal Bank Limited, Fauji Cement Company Limited, Fauji Fertiliser Bin Qasim Limited, Fauji Fertiliser Company Limited, Habib Bank Limited, Hub Power Company Limited, ICI Pakistan Limited, JS Bank Limited, Jahangir Siddiqui & Company, Kot Addu Power Company, Lucky Cement Limited, MCB Bank Limited, National Bank of Pakistan Limited, Netsol Technologies Limited, NIB Bank Limited, Nishat Mills Limited, National Refinery, Oil & Gas Development Company Limited, Pace (Pak) Limited, Packages Limited, Pakistan Oilfields Limited, Pakistan Petroleum Limited, Pakistan State Oil Company Limited, Pakistan Telecommunication Company, Soneri Bank Limited, Sui Northern Gas Pipeline Limited, Sitara Peroxide, Sui Southern Gas Company Limited, United Bank Limited and WorldCall Telecom Limited.

Category 'B' securities eligible for CFS Mk-II are include Attock Petroleum Limited, Bank Al-Habib Limited, Dewan Cement Limited, EFU General Insurance Limited, Indus Motor Company Limited, Meezan Bank, Nishat (Chunia) Limited, Pakistan Elektron Limited, Pakistan International Container Terminal, Pakistan Refinery Limited and Tri-Pack Films.

Copyright Business Recorder, 2008