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PSX set to launch 90-day DFCs
A sign of the Pakistan Stock Exchange is seen on its building in Karachi, Pakistan January 11, 2016. REUTERS/Akhtar Soomro/File Photo

PSX set to launch 90-day DFCs

KARACHI: The Pakistan Stock Exchange (PSX) on Monday (today) will introduce a new eligibility criteria for the trading of futures and communicated the launch of the 90-day maturity Deliverable Futures Contracts (DFC) with effect from DFC August 2021.

The 90-day derivative product will allow traders to gain exposure to DFCs of three different maturities — current month’s expiry, next month’s expiry and last month’s expiry — at the start of each contract month.

In effect, the new regime will reduce the liquidity pressure of the roll-over week. Investors get jittery in the last week of every month when they have to either settle their futures contracts or roll them over to the next month. The availability of the 90-day DFCs means investors will have more time and flexibility in rolling over their existing positions.

As per the new criteria, there shall be no segregation of A and B stocks and shall be select

The PSX has also revised the criteria for the selection of securities eligible for trading in the DFC segment. The revision means more companies are now eligible to trade on the futures counter. Based on a recently notified list quoted by the PSX MD, as many as 84 companies and one exchange–traded fund are now futures eligible.ed based on quantitative factors that measure real liquidity. Exchange Traded Funds (ETF) shall also be eligible if certain conditions are met.

As per the new criteria, there shall be no segregation of A and B stocks and shall be selected based on quantitative factors that measure real liquidity. Exchange Traded Funds (ETF) shall also be eligible if certain conditions are met. However, such companies that have obtained stay orders from the court against any inquiry/investigation initiated by the Commission shall not be eligible.