Advantages of becoming a TREC Holder of PSX

Published On: August 21, 2024

Becoming a Trading Right Entitlement Certificate (TREC) Holder of PSX enables the holder to carry out trading of securities at Pakistan Stock Exchange (PSX). The TREC Holders or securities brokers have the advantage of trading for themselves or for their clients. Infact, holding a TRE Certificate enables a securities broker to have more than just the license to trade on PSX. ​

There are multiple advantages of becoming a PSX TREC Holder. Through this facility, a securities broker gets the opportunity to participate in the multibillion-rupee industry by focusing on corporate equity side as well as the retail brokerage side. The former is geared towards trading for corporate entities such as Asset Management Companies, banks, DFIs etc. and the latter is geared towards facilitating the individual customers such as High Net Worth Individuals and retail investors. TREC Holders can direct their clients to invest in multiple sectors or industries available in the market; from ETFs, Modarabas, mutual funds to futures contracts and others.

By investing and trading for corporate entities, a securities broker can build a strong corporate network which will enable him/ her to capture a share of the institutional market activity. This will enable a securities broker to earn higher revenue streams and liquidity. At present, a TREC Holder can earn 0.15% of transaction value per trade. A TREC Holder can also invest in technology and save money by providing that technology or application to retail clients for investing on the stock market by themselves. This will enable the retail investors to invest directly in the stock market without using the services of an individual securities broker.

Furthermore, TREC Holders can also build partnerships with corporate investors for business development which can add to their revenue streams. Moreover, for both retail and corporate clients, TREC Holders have the option of outsourcing their back-office settlement and other operational processes to a Professional Clearing Member (PCM).

Additionally, TREC Holders can become underwriter for Right Shares issue. They can also become agents for buy-back of shares. As per current rules and regulations, TREC Holders can also act as Advisors for companies wanting to list on the Growth Enterprise Market (GEM) Board of the Exchange, thereby playing their due role of contributing to the growth of the economy. TREC Holders can become market makers as well and can offer government and corporate bonds through the PSX platform.

As mentioned above, there are numerous advantages to becoming a PSX TREC Holder. TREC Holders not only facilitate investors, listing of companies, and market making activity but also contribute to the growth of economic activity in the country.

Disclaimer:

The contents of this article/ blog comprising of information pertaining to financial products, including but not limited to securities, derivatives products, listed companies or companies proposed to be listed on PSX and any content of third parties are strictly of a general nature and are provided for informative and educational purposes only. Such content/ information is not intended to provide trading or investment advice of any form or kind and shall not under any circumstances be construed as providing any recommendation, opinion or indication by PSX as to the merits of the said product, security or company and also not be interpreted as comprehensive and interpretive of all applicable regulatory provisions