The default committee of Karachi Stock Exchange (KSE) has asked two out of five suspended members of exchange to pay the defaulted amount by August 12, 2009, otherwise their cards would be sold to pay off their liabilities.
The committee met here on Tuesday and took up the case of Capital One Securities and Click Securities. Securities & Exchange Commission of Pakistan (SECP) suspended the membership of five brokerage firms last month for violation of regulations and their default on payments of borrowed money.
The other three suspended brokerage companies are Eastern Securities, Prudential Securities and MKA Securities.
According to sources in KSE, the total defaulted amount of these companies is estimated to be around Rs 1.5 billion as only two brokerage firms Capital One and Click Securities, whose case was heard today have the liabilities of Rs 630 million.
At the time of suspension of their membership, SECP declared that the registration of the above-mentioned brokerage houses would remain suspended, in the public interest and for the protection of investors and to preserve capital market integrity, till claims against them in light of the investors complaints are ascertained and settled.
SECP took the action after failure of these members to give a specific timeframe to clear their liabilities and any concrete action plan to for the resolution of outstanding investors’ claims. Upon which by using the regulatory powers, apex regulator issued orders for the suspension of registration of the said brokers.
According to a director of KSE, it seems hard for the suspended members to pay off the claims by August 12 deadline and ultimately KSE would have to sell the card of these suspended members.
The price of a KSE’ s card is estimated to be Rs 75 million currently that recovered a bit when it fell to below Rs 50 million in the crisis-ridden previous year. At the peak time in KSE, its card was even priced at a peak of Rs 140 million, however the sharp fall in equities and crisis in the market eroded its value by around fifty percent.
The default committee of KSE will meet again tomorrow and would hear the case of other two brokerage firms—Eastern Securities and Prudential Securities.
The committee met here on Tuesday and took up the case of Capital One Securities and Click Securities. Securities & Exchange Commission of Pakistan (SECP) suspended the membership of five brokerage firms last month for violation of regulations and their default on payments of borrowed money.
The other three suspended brokerage companies are Eastern Securities, Prudential Securities and MKA Securities.
According to sources in KSE, the total defaulted amount of these companies is estimated to be around Rs 1.5 billion as only two brokerage firms Capital One and Click Securities, whose case was heard today have the liabilities of Rs 630 million.
At the time of suspension of their membership, SECP declared that the registration of the above-mentioned brokerage houses would remain suspended, in the public interest and for the protection of investors and to preserve capital market integrity, till claims against them in light of the investors complaints are ascertained and settled.
SECP took the action after failure of these members to give a specific timeframe to clear their liabilities and any concrete action plan to for the resolution of outstanding investors’ claims. Upon which by using the regulatory powers, apex regulator issued orders for the suspension of registration of the said brokers.
According to a director of KSE, it seems hard for the suspended members to pay off the claims by August 12 deadline and ultimately KSE would have to sell the card of these suspended members.
The price of a KSE’ s card is estimated to be Rs 75 million currently that recovered a bit when it fell to below Rs 50 million in the crisis-ridden previous year. At the peak time in KSE, its card was even priced at a peak of Rs 140 million, however the sharp fall in equities and crisis in the market eroded its value by around fifty percent.
The default committee of KSE will meet again tomorrow and would hear the case of other two brokerage firms—Eastern Securities and Prudential Securities.
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