Sindh govt should declare staff of brokerage houses as ‘Essential Services’: PSA

In a separate letter to Advisor to Prime Minister on Finance Dr. Abdul Hafeez Shaikh, the PSA General Secretary Ghulam Mujtaba Sakarwala informs him regarding operational difficulties in carrying over business at Pakistan Stock Exchange

KARACHI: The federal government has decided to keep the Pakistan Stock Exchange (PSX) open and functional (like Banks) from Tuesday, therefore, The PSX Stockbrokers Association (PSA) has asked the Sindh government to facilitate the PSX, brokers and Staff of brokerage houses during a Civil Lockdown in Karachi.

In a latter forwarded to the Sindh government on Sunday, the PSA President Basharat Ullah Khan said, “Field Officers of Law Enforcement Agencies may be advised to let the Stockbrokers and their Staff (bearing CNIC and letter of the Brokerage House) may be allowed to commute between their residence and the location of the Brokerage House without any hindrance.

He further said that PSX has already banned entry of general public in the Exchange building, therefore, our Brokerage Houses will try to perform their duties with minimum possible strength of Staff.

Federal Government has decided to keep the Stock Exchange (like banks) open, therefore functional Services provided by the Pakistan Stock Exchange and its TREC Holders/Stockbrokers may be declared as “Essential Services”.

In a separate letter to Advisor to Prime Minister on Finance Dr. Abdul Hafeez Shaikh, the PSA General Secretary Ghulam Mujtaba Sakarwala informs him regarding operational difficulties in carrying over business at Pakistan Stock Exchange.

He said the complete lock down in Sindh Province, the operations of PSX will be subject to huge risk, including but not limited to settlement and systemic, apart from human life at stake.

He said that if PSX and it’s ancillary service providers are defined in the essential services, even than stock market investors cannot be defined as such. Therefore, stock market investors will not be in a position to honour their commitments as to payments and deliveries and the transactions occurred during last 2 working days are subject to settlement from March 24, 2020 which will carry a huge risk for the entire fraternity due to the lock down.

He further informed to Hafeez Shaikh that the requirements of exposure & margin deposit on next working day is assumed to be huge as stock market might test number of halts before consolidating itself. Stockbrokers might not be able to gather these exposure & margins from its client’s which might result in total chaos and give rise to operational, settlement & systemic risk.

He said that next week is subject to rollover of positions in Deliverable Future Market which will also be on stake.

The secretary general of PSX Stockbrokers Association said we are of the considered view that the present situation comes under force majeure and it is indeed need of an hour to extend the holiday of March 23, 2020 for such number of days as has been prescribed by Sindh Government in its shut down notice and stock market shall forthwith be operational with the lifting of shut down notice by the Sindh Government. Furthermore, transactions in Deliverable Future Market of March 2020 be automatically merged with April 2020 contract to be opened. This will enable our members, investors and PSX to gear-up themselves.

He said that our proposal to extend holiday of March 23, 2020 is in line with China and only and only due to following two reasons:

1. Sindh Government Shutdown Notice;

2. Corona Virus where we consider Human life is more important.

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