Stock market reforms

New Capital Market Commission Chairman Alexis Pilavios said yesterday that investors who have deserted the Athens Stock Exchange will not come back unless they can make profits from company listings on the market. Pilavios, who made these remarks before the resignation of ASE President Panayiotis Alexakis became known, promised significant changes in the operation of the market. He added that he would strictly enforce the rule that obliges share buyers who bought on margin to pay for the shares within three days of acquiring the stock or have the transaction voided. In a related development, the Bank of Greece announced yesterday it had raised the maximum credit limit for margin trading to private clients from credit institutions and security firms to 1 million euros from a previous 150,000 euros. Buying stock on margin means buying stock with money borrowed against stocks in one’s account, with the stocks acting as collateral to guarantee the investor can repay the loan. If not, the stockbroker has the right to sell the stocks to recoup the borrowed funds. Pilavios said that the strict enforcement of the rule, together with the adoption of a European Union directive on stock manipulation and insider trading would «put an end to speculative games by certain lobbies,» end the practice of acquiring stocks without possessing the necessary funds and fight any attempt at manipulating the market. Securities firms will be obliged to inform the commission of any illegal behavior by their clients. Pilavios also said changes will be made in the listing of shares, their pricing and issue coverage requirements. The detailed results of the public subscription must be made public within two working days from its end.