November 21, 2023 (MLN): In response to a troubling scenario where the National Clearing Company of Pakistan Limited (NCCPL) system purportedly displayed erroneous exposure margins for multiple brokers during yesterday’s session, the Pakistan Stock Brokers Association (PSBA) on Tuesday demanded a comprehensive explanation and clarity regarding the incident.
In a strongly worded letter to NCCPL, PSBA sought clarification on why exposure margin errors occurred despite brokers maintaining adequate margins.
“The incident in question pertains to the exposure margin errors shown by the National Clearing Company of Pakistan Limited (NCCPL) system, despite all the affected brokers being on adequate margins,” the letter reads.
Subsequently, the system check was bypassed, allowing them to trade in the market. This has caused significant disruption, lasting half an hour, starting from the market i.e., 9:30 AM.
The incident has left brokers deeply disappointed and discouraged as brokers dealing with the Capital Market Infrastructure Institutions.
Expressing deep disappointment, the association further added, “You are also aware that the most important factor that Impacts the operation of the capital market is the change in the level of trust placed in the industry.”
In the middle of a thriving stock market, such systematic errors cast a shadow on the integrity of the trading cycle and create an environment of uncertainty for participants, it said.
It is imperative that during periods of heightened activity and positive market trends, the systems in place demonstrate resilience and efficiency to support the increasing demands.
Thus, the association demanded a detailed and transparent explanation that why the exposure margin errors occurred in the first place, despite brokers maintaining sufficient margins.
The association also demanded an explanation for the extended half-hour duration it took to rectify the situation, with specific details on the steps taken to address the issue.
“We find it necessary to question whether our investors are truly being provided with an error-free trade mechanism or if our institutions have, regrettably, failed to fulfill their legal obligations & objectives of formation,” it emphasized.
PSBA also urge that accountability must be established in order to rectify and prevent similar incidents from occurring in the future, and also what measures the NCCPL will take in order to support the market for their losses.
It is important to highlight the fact that it has been nearly seven months since the New Trading System came into operation.
However, the institutions operating within this system seem to be woefully misaligned with the developments and challenges of the market around them.
The losses incurred, both in terms of financial and opportunity costs, as well as the subsequent damage to the reputational credibility of the market, are becoming increasingly difficult to manage.
Copyright Mettis Link News
Posted on:2023-11-21T22:41:40+05:00
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