February 16, 2024 (MLN): The National Clearing Company of Pakistan Limited (NCCPL) has announced the implementation of the Margin Financing System (MFS) Rollover Facility, with effect from February 26, 2024, according to a notice issued by the local bourse today.
This rollover option will facilitate Margin Financier for recovery of accrued mark-up from Margin Finance at regular intervals before the maturity of the MF Transaction.
Moreover, it will facilitate the Financier by improving its liquidity position due to periodic recovery of markup over the term of the MF Transaction.
There would be a collection of accrued mark-up from margin fiancée without any change in the mark-up rate or MF transaction value.
This rollover facility shall only be applicable for recovery of accrued mark-up at regular intervals of 5, 10, or 22 business days commencing from the date of the MF transaction or the last rollover carried out.
For new MF Transactions, the Financier will have an option to define UIN Wise/Symbol Wise rollover frequency before initiating an MF Transaction.
Rollover frequency (in days) once set by the financier cannot be modified i.e it will remain the same until the release of MF position.
To note, the principal amount of the MF transaction shall remain unchanged and the rollover will not be part of the NCSS settlement. Meanwhile, the actual MF open position date shall remain unchanged.
Existing rollover functionality for change of price and premium will remain unchanged and calculate premium according to the existing mechanism.
