The State Bank of Pakistan Wednesday allowed trading of government securities including market treasury bills, investment bonds and Ijara Sukuks on the country’s stock exchanges.
The move is aimed at broadening the investors’ base in government securities. However, the current interbank trading of government securities and all its associated platforms will continue to work as usual.
The central bank issued a circular in this regard. It said all primary dealers (PDs), as appointed by State Bank of Pakistan on annual basis in accordance with rules governing primary dealer system are allowed proprietary trading of government securities on the stock exchanges provided such trading is carried out by the PD directly on the workstation given by the exchange for this purpose. Such PDs will be referred as ‘Trading Participant’ on the exchange.
They will act as a market maker on the exchange for government securities, settle and clear the transactions executed by their customers through other designated Trading participants on the exchange. The central bank said all PDs, who opt to participate as a trading participant on the exchange, will be required to formally inform SBP about the start date of their operations.