KARACHI (January 06 2009): The National Clearing Company of Pakistan Limited (NCCPL) on Monday announced that the outstanding CFS shares worth Rs 6.6 billion have been settled under the CFS Mk-II Square-up Scheme, however, four members are still unable to meet their final aggregate demand of around Rs 160 million.
"Consequently, the four members (three from Karachi Stock Exchange and one from Lahore Stock Exchange) have been served final loss notices by NCCPL of one business day to settle their outstanding demand," NCCPL said in a notice issued here.
The NCCPL said that in order to settle the CFS MK-II open position of Rs 9.8 billion a Voluntary CFS MK-II Square-up Scheme was agreed between all the stake holders ie SECP, Mufap, commercial and investment banks and members of the stock exchanges.
The scheme was designed for the orderly squaring up of the CFS MK-II market and the underlying CFS financed securities along with associated margin eligible securities so as to minimise losses to the authorised financiers on their CFS financed positions and minimise the final losses to the financees.
Under the scheme CFS Financed securities and their associated margins were sold at a 12.5 percent discount to the closing price as of December 24, 2008. Accordingly, National Clearing Company of Pakistan Limited (NCCPL) circulated the modus operandi of the said scheme to all CFS MK-II participants on December 26, 2008 wherein it was advised to all concerned to submit their consent, in writing on the prescribed format, to participate in the scheme latest by December 28, 2008.
As many as 90 financees and 65 authorised financiers participated in the scheme along with Government Owned Institutions (GOIs) - National Investment Trust, State Life Insurance Corporation and National Bank of Pakistan.
Authorised financiers opted into the programme had agreed to purchase CFS financed securities of approximately 30 percent of the total value they have financed in the CFS MK-II market. They will purchase only the shares they have financed together with shares deposited as margin against these shares.
GOI had also agreed to purchase an equivalent amount of exactly the same shares ie 50 percent of the total quantity of CFS financed securities equally purchased by GOIs and authorised financiers. Accordingly, Rs 6.6 billion of CFS have been settled under the said scheme. Respective stock exchanges have also participated in the scheme by supporting their respective members by contributing up to Rs 50 million as a loan subject to the completion of necessary formalities.
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