Karachi: In a significant development, the Pakistan Stock Exchange (PSX) has announced the induction of three mutual funds as trading participants for proprietary trading in Government of Pakistan Ijarah Sukuk (GIS). This move follows the approval by the Securities and Exchange Commission of Pakistan (SECP) under the proviso to Regulation 6.1(q) of the PSX Rulebook, which permits commercial banks and mutual funds, classified as Non-Broker Debt Market Clearing Members (DMCMs) of the National Clearing Company of Pakistan Limited (NCCPL), to engage in such trading activities.

The announcement, detailed in PSX Notice# PSX/N-1205 dated December 16, 2024, grants trading system access to commercial banks and mutual funds specifically for the proprietary trading of GIS. The recently inducted mutual funds, which include Meezan Cash Fund, Meezan Sovereign Fund, and Meezan Islamic Income Fund, have met all necessary documentary, operational, and technical prerequisites to commence trading.

According to information available from the Pakistan Stock Exchange (PSX), these mutual funds will now have the ability to trade in GIS instruments issued through primary market auctions at the PSX. However, their trading activities will be limited to GIS for their proprietary accounts, as they will not be permitted to trade in other fixed income securities in the Bills and Bonds market, such as Corporate Debt Securities and Government Debt Securities.

This initiative is expected to enhance the liquidity and efficiency of the GIS market, providing more opportunities for market participants within the designated market category.