DERIVATIVES IN PAKISTAN In the year 2001, Pakistan Stock Derivatives products were started in the Karachi Stock Exchange. At the start of this launch, a single futures stock was presented for introduction that was deliverable for just one month. Almost nine years have passed since then, but this stock market is not considered that developed when compared to the Indian market. Derivatives related to finance and traded in terms of foreign exchange were initially started in Bombay Stock Market and National Stock Market of India in June of the year 2000. Some of the futures related to indices based on BSE Sensitive Index ( Sensex) and the S&P CNX Nifty index (Nifty) were started in the very first phase. Since then, the Indian National Stock Exchange has seen a sudden increase in the turnover of derivatives contracts. Generally, in developing or developed stock markets, people investing in the market rely primarily on taking derivative positions and instruments with respect to the things that constitute the underlying assets. The case is not so in Pakistan. From January to June 2010, the market consisting of futures in the form of value and market value was 3% and 8%, respectively. In the last days of the year 2004 and the beginning of 2005, this contract was concluded in terms of volume. In this period this value has been increased up to 30 and 40% of market values. But unfortunately at this time, due to the infrastructure market and weak risk management measures, such as the market crisis in March 2005, the outgoing cannot maintain a position of influence. After the crisis, many measures have been taken to manage...... the market...... paper, which is allowed to trade on the market. Only one institution out of the total number claimed to regularly participate in the market and with that 10 institutions are allowed as a primary basis to trade to seize arbitrage opportunities. 6 of them cover the portfolios they already have. (See Attachments A and B for survey results) Next, institutions were asked to rate the derivatives market in Pakistan in terms of affordability and efficiency. The scale was from 1 to 5 and '1' was for “Excellent” while “5” was assigned as very bad. We obtained the response of 76% of participants in positions “4” and “5”. This surprised us that a good number of institutions showed belief in our sample that regulators are successfully saving investors' interest in the derivatives market.