OUR CORRESPONDENT
KARACHI
The Pakistan Stock Exchange (PSX) is set to relaunch Cash-Settled Futures (CSF) from December 1, 2025, marking a major overhaul of the derivatives segment aimed at improving market depth, transparency, and risk management. The National Clearing Company of Pakistan Limited (NCCPL) on Friday issued operational guidelines to market participants ahead of the relaunch.
According to NCCPL, the clearing, settlement, and risk management functions for the revamped CSF market will be fully handled by the company under updated regulatory and tax frameworks. The relaunch also comes with significant cost relief, as the PKR 250,000 Market-wise Basic Deposit and NCCPL trade fees on CSF will remain waived for the first three months to encourage participation.
A key upgrade in the redesigned CSF framework is the introduction of a more transparent Capital Gains Tax (CGT) mechanism. Settled positions will be taxed on actual trade prices, whereas daily mark-to-market (MTM) valuations will determine CGT for open positions. At contract expiry, any remaining open positions will be taxed using the ready-market closing price of the final trading day—bringing uniformity with global futures markets.
NCCPL has also enhanced post-trade infrastructure, adding new filters and reports in its Post-Trade Risk Management System (PTRMS), including a dedicated CSF Actual Trade Price Report to track daily profit and loss and exposure. Cash management screens have been updated for settling banks, while brokers have been advised to obtain fresh Pledge Group IDs for margin-related collateral.
The Designated Time Schedule (DTS) for the CSF market will mirror that of the ready and deliverable futures markets.
Market officials say the relaunch is expected to revive derivatives trading, which has remained subdued in recent years due to structural and regulatory constraints. With improved tax clarity, operational efficiencies, and cost waivers, the new CSF platform is seen as a step toward deepening Pakistan’s capital markets and offering investors better hedging tools.