KARACHI - The Karachi Stock Exchange (KSE) on Sunday extended "price freeze mechanism" in the shares of more than 650 financial companies, keeping it in place at least until after the government pumps promised funds into the stock market to bailout the trapped investors in continuous funding system (CFS) market and picking up shares pledged with the banks. The board of KSE announced to keep the floor mechanism in place, which was put in place on August 27 in a bid to save the investors and members from the expected default, owing to the continued recession and crisis in the share market. The floor mechanism, which was to expire October 27 (today) now will last until the government promised funds and put option mechanics are finalised. The board has not mentioned a date for the removal of floor. The Karachi Stock Exchange imposed the floor at 9,144 points on August 28, after a 36 per cent fall from the beginning of the year. The exchange board said on Oct 14 the floor would be removed on Oct 27. The floor has stifled trade and the index ended flat at 9,182.88 points on Friday. However, the KSE board has said that an extraordinary meeting between the KSE board and Advisor to Prime Minister on Finance Shaukat Tarin will be held on coming Friday to review over the progress made in the both abovementioned issues. The idea is that the further extension on floor mechanism will give enough time for the state enterprise fund, National Investment Trust (NIT) (entrusted with organizing the newly market stabilisation fund) to arrange needed funds mainly to execute bailout programme plan to buy up toxic outstanding shares in the CFS market and those pledged with the banks. The Board of Directors of KSE on Sunday held a meeting with Shaukat Tarin. In the meeting, KSE board took up market stabilisation measures with the Advisor to PM on Finance. The KSE board had highlighted the necessary injection of substantial funds in the share market and additional risk management of leverage products to counter the expected financial tsunami after the removal of floor. However, in the meeting the representatives of NIT informed the regulators Securities and Exchange Commission of Pakistan (SECP), KSE and Mr Tarin that the technicalities of the put option guarantee to the foreign investors and the newly announced fund of Rs20 billion still required additional time for implementation. In the light of this situation, the KSE board decided that the floor mechanism should remain in place until the government funds and put option mechanics are finalized. Speaking at the press conference held soon after the meeting with KSE, SECP and Mr Tarin, KSE Managing Director Adnan Afridi appreciated the commitment and ongoing support extended by the government particularly that of Shaukat Tarin and Razi-ur-Rehman Khan, the Chairman SECP for resolving the issues being faced by Pakistan's capital markets. Answering to a question, Afridi said that the members of the KSE were not putting pressure on the KSE board to shut down the market. Replying to an other question about the meeting held on Saturday night between the MQM legislators and leading broker Aqeel Karim Dhedi at his residence in the back drop of liquidity crunch in the financial system, he said that an individual who tries to do some thing to solve the crisis in the stock market is not acting on behalf of the KSE board. It may be noted here that on Saturday, the KSE members unanimously passed a proposal, in which they had linked the removal of floor with the injection of newly announced fund. In another development, leading brokers Arif Habib, Jahangir Siddiqui and others met with Shaukat Tarin on Sunday. The leading brokers had requested Shaukat Tarin two percent cut in the interest rates and to ask the banking sector to make sure the arrangement of needed liquidity as the banks have promised in the meeting with the Governor State Bank.