KARACHI - The members of the Karachi Stock Exchange have proposed its management to close down the exchange if their proposals were not addressed immediately, as panic mounted among the brokers following the default of a KSE member during Friday trading. After the CFS rate touching the peak of 68 per cent on average, the alarm spread among the KSE members and they proposed its board to ask the National Clearing Company of Pakistan Limited (NCCPL) for the CFS buying of Rs 700 million. When the NCCPL failed to arrange this amount the members asked the management to freeze the Continuous Funding System on the point of 24 per cent otherwise halt the trading at the KSE for 15 days. In this regard, the KSE board has called a meeting with the SECP on Saturday (today) to review the situation emerged after the record increase in CFS rate. Meanwhile, the Karachi Stock Exchange and National Clearing Company of Pakistan Limited (NCCPL) have decided to settle the Friday's CFS for share transactions with the CFS volumes of coming Monday. Decision to this effect was taken in a meeting between KSE board and NCCPL held on Friday in the backdrop of record high increase in CFS rate. Meanwhile a well-known broker, who has been director of the Karachi stock market (KSE) as well finally default on exposure counter owing to not paying in range of Rs30million to Rs100 million, thus the KSE has two options either to sell his card or 20 per cent security held with the exchange against exposure payments, sources told The Nation. However, some inside sources added the KSE has extended the date of exposure payment till next two days and if the member arrange the exposure payments in these days, he will be safe from default payments. But the Karachi stock exchange has neither endorsed the default of member nor issued any statement in this regard. However, inside sources said that a well known member of KSE default on exposure counter on Friday following the issuance of several notices by the KSE to pay the exposure payment but the continued recession and crisis in the stock market has diminished the capacity of the member to settle up exposure payments. Sources said the member had to pay Rs100 million to the stock market against the exposure payments but failed to pay the due amount. Sources said that either the KSE will sell the membership card of the member or confiscating 20 per cent assets, held with the stock market as security against exposure payments. While some sources pointed out that actually the KSE had issued notice to the members in which it stated that if the member failed to repay the exposure payments by Friday, the market would seize his security. Sources said that a consortium has offered the member, who is said to be default to sell his membership card on worth Rs65 million. It is pertinent to mention here that the news of default of the member spread like wildfire as soon as a private TV channel aired the news, resulting several rumours were circulating in this regard, till the filling this report there was development came out from the market that the members who was being considered as defaulter, has finally arranged the exposure payments of Rs30 million. Agencies add: Karachi Stock Exchange on Friday reluctantly decided to unfreeze itself by October 27 only if the government fixes a cap on interest rates on loans taken by top brokers, sources said. "The decision to unfreeze is only tentative. We are watching the government to see if it will inject money into the market and put a cap on interest rates," Akeel Karim Dhedhi, chairman of local giant AKD Securities told a German news agency. The stock market, roiled by domestic political instability and economic turmoil, has been virtually closed for the last two months after losing almost 50 per cent in value since May. Among the major reasons for the decline is a bleak investment scenario due to growing violence in NWFP, a spate of suicide bombings across the country, and mounting tensions between NATO forces and the Afghan government. Meanwhile, the recent credit crunch has caused the interest rates on short-term loans to shoot up to an all-time high of 60 per cent. Dhedhi said the Directors of Karachi Stock Exchange in a meeting with the state watchdog, the Securities Exchange Commission of Pakistan (SECP), had demanded a cap on interest rates at 24 per cent. Dhedhi said the meeting was still going on and no decision was taken so far whether the SECP would convince the financial institutions to lower the interest rates for brokers. "Many top guns of the market are on the verge of bankruptcy," said Mudassar Malik Director at the BMA Capital Management. Though State Bank of Pakistan has pumped more than 20 billion rupees in the money market this week the interest rates kept climbing.