28 May 2016
Muscat - In move is seen as a boost to investment environment in the Muscat Securities Market, the Capital Market Authority (CMA) has amended the Secured Financing Directives. According to the amendments, the amount a licensed brokerage company can offer as secured financing to a single client has been increased to RO 500,000 from RO 250,000, provided that the sum is not more than 15 per cent of the funds a licensed company provides as secured financing. Earlier, brokerage companies were allowed to provide secured financing for trading in only MSM30 index companies. The new move allows more flexibility in trading operations.
Abdullah al Salmi, executive president of CMA, the amendments aim to expand the base of licensed companies dealing in secured financing and to include listed companies of regular and parallel markets of the local bourse. "The new amendments were made in line with CMA's policy in reviewing the regulations to enhance their efficiency to cope with the developments in the stock markets to deal with the shortcomings and protect the market participants", he said. According to the regulator, the amendment is done after taking into account the flexibility and options for investors to achieve their investment objects, besides the benefits to brokers due to increased trading volumes. There is also an increase in the duration of the maintenance of margin to five days from the earlier three days, enabling brokers to meet the margin maintenance ratio from clients.
He added that the directives aim to expand the base of the licensed companies to deal in accordance with the secured financing, which is also known as margin trading to include the companies in the regular and parallel markets allowing more options and opportunities to increase trading volumes.
Where the actual margin falls below the agreed maintenance margin the regulation obligates the broker to inform the client immediately after the trading session to top up the actual margin to the level of the agreed maintenance margin in not more than five days from the trading date on which the fall had occurred. The licensed companies were allowed to deal with the securities listed on the regular and parallel markets based on standards set out by the companies.
Muscat - In move is seen as a boost to investment environment in the Muscat Securities Market, the Capital Market Authority (CMA) has amended the Secured Financing Directives. According to the amendments, the amount a licensed brokerage company can offer as secured financing to a single client has been increased to RO 500,000 from RO 250,000, provided that the sum is not more than 15 per cent of the funds a licensed company provides as secured financing. Earlier, brokerage companies were allowed to provide secured financing for trading in only MSM30 index companies. The new move allows more flexibility in trading operations.
Abdullah al Salmi, executive president of CMA, the amendments aim to expand the base of licensed companies dealing in secured financing and to include listed companies of regular and parallel markets of the local bourse. "The new amendments were made in line with CMA's policy in reviewing the regulations to enhance their efficiency to cope with the developments in the stock markets to deal with the shortcomings and protect the market participants", he said. According to the regulator, the amendment is done after taking into account the flexibility and options for investors to achieve their investment objects, besides the benefits to brokers due to increased trading volumes. There is also an increase in the duration of the maintenance of margin to five days from the earlier three days, enabling brokers to meet the margin maintenance ratio from clients.
He added that the directives aim to expand the base of the licensed companies to deal in accordance with the secured financing, which is also known as margin trading to include the companies in the regular and parallel markets allowing more options and opportunities to increase trading volumes.
Where the actual margin falls below the agreed maintenance margin the regulation obligates the broker to inform the client immediately after the trading session to top up the actual margin to the level of the agreed maintenance margin in not more than five days from the trading date on which the fall had occurred. The licensed companies were allowed to deal with the securities listed on the regular and parallel markets based on standards set out by the companies.
© Oman Daily Observer 2016
