LAHORE - Securities Lending & Borrowing (SLB) and Margin Trading System (MTS), being introduced in the local exchanges, are in line with international practices of leverage market. The MTS differs from its predecessor CFS-Mk II in many ways. This was stated by Badiuddin Akbar, Head of Operations of National Clearing Company (NCCPL), during his detailed presentation on the features of MTS held at LSE. He said the leverage through MTS will be in line with international practices of equity participation between financier and financee. The minimum equity participation of financee will be 25% of its total position in leverage market. The MTS contracts will mature after 60 calendar days as against 22 working days period of CFS-Mk II; the MTS also requires force-releasing of one-fourth of open position at 15 calendar days interval to reduce risk inherent in leverage trading. The MTS has also imposed minimum requirements for the financiers & financees. Only corporate entities shall be allowed to act as a financier and only members that have a minimum Net Capital Balance of Rs. 5 million will be allowed to avail financing through MTS. The SLB product was also presented along with MTS. The SLB will provide for a prior arrangement of borrowing securities to cover the short sale under the Ready Market scrips. The SLB system will also allow investors to lend and hence get returns on their idle portfolio holdings. In another presentation, the NCCPL also introduced the IBFT facility that allows transfer of funds between banks and clearing members in a time efficient manner. Members, traders and investors have been waiting for a leverage product since CFS-Mk II was discontinued in 2008. MTS has been finalized after detailed discussions with all the stakeholders and has received final approval from the SECP. The MTS will be launched soon after Gazette notification of amendments in regulatory framework of the exchanges, CDCPL and NCCPL required for its introduction.