Karachi: The Pakistan Stock Exchange (PSX) has announced proposed amendments to its regulations concerning the Government Debt Securities (GDS) market, aiming to broaden participation and enhance liquidity. The proposed changes, which have been put forth under the powers granted by the Securities Act, 2015, involve significant adjustments to Chapter 6 of the PSX Regulations.

As of now, eligible commercial banks are permitted to act as Trading Participants for trading subsidiary general ledger account-based GDS on their proprietary accounts at the PSX. These banks are also authorized to perform market-making activities for listed debt securities, including GDS. The new amendments propose extending these permissions to mutual funds, allowing them to also act as Trading Participants for executing secondary market trading in Central Depository System (CDS) eligible GDS for their proprietary accounts.

The amendments aim to clarify and specify the roles of 'commercial banks' and 'mutual funds' as Trading Participants within the relevant provisions of Chapter 6 of the PSX Regulations. According to information available from the Pakistan Stock Exchange (PSX), this move is intended to boost the participation and liquidity of the CDS eligible GDS Market trading at PSX.

The PSX highlighted the proviso to clause 6.1.(q) in Chapter 6, which empowers the exchange to authorize any entity as Trading Participants for CDS eligible GDS, contingent on approval from the Securities and Exchange Commission of Pakistan. By explicitly including commercial banks and mutual funds in the regulations, the PSX seeks to ensure clarity and streamline participation in the market.

These proposed amendments are now open for public comments, allowing stakeholders and interested parties to provide their input. The PSX’s move is part of its ongoing efforts to enhance market efficiency and accessibility, particularly in the realm of government debt securities trading.