The Stock Exchange is a place where shares of listed companies are bought and sold. Companies list themselves on the stock exchange to raise capital. Shares of companies are traded, after they are listed, through a process of Initial Public Offering (IPO) or Secondary Public Offering (SPO). The share purchase represents ownership of the shareholder in a company to the extent of amount contributed by the investor to the capital of that company.

Corporate Bonds (Term Finance Certificates - TFCs etc.) and Government Debt Securities - GDS (Treasury Bills etc.) are also listed and traded on the Stock Exchange. Bonds are listed by a company that wants to raise capital in return for fixed periodic payments as mark-up and the eventual return of principal to the investor. GDS are listed by the Government to raise capital whereby the securities give fixed periodic returns as profit with eventual return of principal to the investor.

A company floats its shares for the first time through an IPO in the share market. These shares can be purchased by filling and submitting the share subscription form along with the payment of subscription amount through cheque (or through any other instrument of payment recommended by the issuer company) at a branch of the designated bank(s). The shares are subscribed at a pre-designated price. In an SPO, shares are offered by a listed company by way of issuing new shares, called Right Shares, or through off-loading of more shares (held by directors and others) in the market. The share price is set on the stock exchange platform as the shares are bought and sold.

Pakistan Stock Exchange (PSX) has 558 listed companies distributed amongst 40 sectors. There are 7 Indices listed on PSX board. Part of the PSX ecosystem are the CDC (Central Depository Company) through which delivery of shares takes place, and NCCPL (National Clearing Company of Pakistan Limited) through which settlement of shares takes place.

Potential Investors are advised to contact a TREC (Trading Rights Entitlement Certificate) holder/ licensed brokerage firm for their account opening and trading on the Stock Exchange.

Download Investor Awareness Guide

  • Primary market/ IPO – Dos: A (prospective) investor must read the Prospectus/ Abridged Prospectus issued against an IPO carefully and note the following:

    • Risk factors pertaining to the issue.
    • Financials of the issuer.
    • Object of the issue.
    • Outstanding litigations & defaults, if any.
    • Business overview.
    • Background of promoters.
    • Instructions before making application.

  • Primary market/ IPO – Don’ts:

    • Do not fall prey to market rumours.
    • Do not go by any implicit/ explicit promise made by anyone.
    • Do not invest simply based on the bullish trend of the market industry/ issuer company.
    • Do not bank on the price of the shares of the issuer company going up in the short run.
    • Do not invest just because others are doing it also.
    • Do not invest just because the issuer company has a good reputation. Study the details behind the issue.

  • Secondary Market– Dos:

    • Transact only through Stock Exchange.
    • Deal only through registered brokers/ TREC holders of PSX with valid license for brokerage issued by SECP.
    • Complete all account opening formalities properly
    • Read & properly understand the risk associated with investing in securities before investing.
    • Assess the risk-return profile of the investment as well as the liquidity & safety aspects before investing.
    • Invest based on sound reasoning, taking into account all publicly available information.

  • Secondary Market – Don’ts:

    • Given the benefits of trading on the Stock Exchange, it is advisable to avoid off-market transactions.
    • Don’t deal with unregistered intermediaries.
    • Don’t fall prey to promises of unrealistic returns.
    • Don’t invest on the basis of hearsay & rumours; verify before investment.
    • Don’t forget to take note of risks involved in the investment.
    • If new to share trading, it is strongly recommended that (prospective) investor obtain proper professional investment advice before investing in shares.

Following are some of the important considerations before investing in the stock market:

Stock Investment Guidelines:

  • DIVERSIFY YOUR INVESTMENT: The best way to minimise risk is to diversify your investments across various investment products. If equities are your sole investments, it makes sense to diversify between different sectors and companies. In this way, loss incurred on some investments can be absorbed or compensated by gains made in others.

  • UNDERSTAND YOUR RISK PROFILE: As an investor, you must choose between how much risk you can take as all investments carry a certain amount of risk. Consider an investment product not only according to your requirements and how much capital you can invest, but also according to your tolerance of risk. Depending on how ‘risk averse’ or ‘risk-prone’ an investor you are, you may choose an investment accordingly.

  • DO YOUR HOMEWORK BEFORE YOU INVEST: To invest well, you must gather and understand all relevant information regarding the investment you are going to make. This includes studying companies’ annual reports, accounts and other statements while keeping abreast of what is happening in the said sector or industry. Consult your investment adviser/ stockbroker to get the latest market information about shares you wish to buy or sell. Do not buy into rumours or be pressured by anyone’s grave but unfounded recommendations before making an investment decision.

  • THINK LONG TERM: Investment in shares does not necessarily result in instant yields. Do not invest any money which you may need immediately, since the price of shares can go up and down. Studies have shown that investments properly timed and based on strong fundamentals have been proved to be very profitable for investors in the longer term.

  • JUDGEMENT OF TIMING: The aim of investing in stocks and shares is to buy at low and sell at high. Knowing when, however, is the challenge. While it is not easy to time the market, investors should try their best to buy when the upswing has begun, and sell as the downswing starts.

  • AVOID HERD MENTALITY: The stock market is driven by two emotions: greed & fear. People are usually caught up in the boom hype and pay beyond the worth of shares. This is the greed that drives bull markets. Don’t allow greed to become your need. In bear markets, people get carried away with the ruling pessimism and are eager to sell their investments believing in the worst rumours. This is the fear that dominates bear markets.

  • BEWARE OF SCAMS: Beware of promises of quick profits or sky high returns. Investors must bear in mind that higher the gain on investments, higher is the risk involved. This is the fundamental risk/ reward trade-off.

  • KEEP AN EYE ON STOCKS’ PERFORMANCE: Investors must keep an eye on the performance of stocks. They can do so through newspapers, digital media, investment magazines, brokerage firms’ research articles or through other media. A company’s stock performance can take a boost or downturn based on some fundamental changes in the company such as a structural or financial reform. Similiarly, a company can face seasonal or circumstantial boom resulting in better stock performance.

  • TAXES & COMMISSIONS: As an investor, you must know the rates of taxes and commissions charged by the Federal Board of Revenue/ Brokerage firm as these affect your costs and hence your returns. There is no prescribed rate of commissions charged and it can vary from firm to firm. Investors must take into consideration the taxes that will be deducted from the trading transactions they will undertake. (For details on current taxes and charges levy, contact your brokerage firm).

Stock Investment Basic Concepts:

  • DIVIDEND & DIVIDEND YIELD: An investor may invest in stocks of a company for its Dividends.
    Dividend is the return paid to shareholders out of the profits of the company. Dividend can be cash dividend or bonus dividend/ shares. Dividends may be paid out by a company more than once a year.
    Cash dividend provides for a measure called Dividend Yield. Yield is the measure of cash flow that an investor gets on the amount invested in a security. Dividend Yield is a financial ratio that indicates how much cash dividend a company pays in terms of its share price. Dividend yield is calculated by dividing the cash value of the dividend by the share price. It is defined in percentage.

  • EARNING PER SHARE (EPS): This is a ratio calculated by dividing a company’s net profit after tax by the number of shares outstanding. It’s a measure of the strength of the company in terms of its earning capability for each share issued.

  • PRICE EARNING RATIO (P/E): This is a ratio calculated by dividing the current share price by its EPS. It’s a measure of valuation and indicates whether the price of a share is realistic and is in-line with its earning. If the share is over-priced, then the ratio will be high and if the share-price is low, the ratio will be low.

  • BOOK VALUE OR BREAK-UP VALUE: Book Value per share is calculated by dividing the total equity of a company by its number of shares outstanding. This ratio indicates the asset coverage that each equity share represents in the company.

  • CAPITAL GAIN: Capital gain is the selling of shares at a higher price than the purchase price. Multiple such trades can result in multiple capital gain accruing to the investor.

  • COMPOUNDING: Compounding is the process in which an asset’s earnings, from either capital gains or profit, are reinvested to generate additional earnings over time. This Investment will generate earnings from initial principal and accumulated earnings from preceding periods.

  • DIVIDEND REINVESTMENT: This is the process whereby cash dividends earned from a company are reinvested for stock investment.

Pakistan Stock Exchange has begun an initiative to develop awareness of public at large about the financial concepts, investment basics and financial planning. The objective is to ensure the general public is equipped with knowledge related to financial and retirement planning & basic concepts of investments, stock market investments and other investment related considerations.

Financial education enhances the consumers/investors understanding of financial products and concepts through information, instruction and/or objective advice. Simultaneously it develops the skills and confidence among investors/consumers to be able to gauge financial risks and opportunities so that they can make informed choices, to know where to go for help, and to take other effective actions to improve their financial well-being.

The Open Sessions aim to improve the learning curve and to create awareness about investment avenues. These sessions are meticulously planned by PSX team and are geared toward maximization of investment activity.

Want to become part of an investor awareness session?

Educational Institutes

Date Name Financial Literacy Initiative Region
Feb 13, 2020 Karachi Public School – KPS Financial Literacy Initiative Karachi
Feb 11, 2020 Alcott College Financial Literacy Initiative Karachi
Dec 18, 2019 DUHS Financial Literacy Initiative Karachi
Dec 11, 2019 Commecs College Financial Literacy Initiative Karachi
Dec 2, 2019 SZABIST Karach Financial Literacy Initiative Karachi
Nov 28, 2019 Meritorious College Financial Literacy Initiative Karachi
Nov 26, 2019 Credo College Financial Literacy Initiative Karachi
Nov 21, 2019 Dow University Financial Literacy Initiative Karachi
Nov 15, 2019 NYDS Financial Literacy Initiative Karachi
Nov 14, 2019 NED Financial Literacy Initiative Karachi
Nov 7, 2019 Beacon House Financial Literacy Initiative Karachi
Oct 31, 2019 Bahria University Financial Literacy Initiative Karachi
Oct 30, 2019 Karachi Univeristy Financial Literacy Initiative Karachi
Oct 29, 2019 Dawood Public Financial Literacy Initiative Karachi
Oct 17, 2019 ICMAP Financial Literacy Initiative Karachi
Sep 26, 2019 Progressive School Financial Literacy Initiative Karachi
Sep 16, 2019 Jinnah University Financial Literacy Initiative Karachi
Sep 5, 2019 TMUC Financial Literacy Initiative Karachi


Date Name Financial Literacy Initiative Region
Oct 14, 2019 HBL Financial Literacy Initiative Karachi
Jul 16, 2019 Bank Alfalah Financial Literacy Initiative Karachi
Jul 8, 2019 UBL Financial Literacy Initiative Karachi
Jul 2, 2019 Silk Bank Financial Literacy Initiative Karachi

Corporates & Agencies

Date Name Financial Literacy Initiative Region
Jan 31, 2020 British High Commission Financial Literacy Initiative Karachi
Jan 28, 2020 Open Session (Students of Karachi) Financial Literacy Initiative Karachi
Jan 9, 2020 Inter Karachi Session in Trading Hall (TSA) Financial Literacy Initiative Karachi
Jan 8, 2020 Federal Board of Revenue CSS Batch Financial Literacy Initiative Karachi
Nov 17, 2019 Hyderabad Gym Khana Financial Literacy Initiative Karachi
Nov 5, 2019 ICI Financial Literacy Initiative Karachi
Oct 3, 2019 KEL Financial Literacy Initiative Karachi
Jul 16, 2019 Bank Alfalah Financial Literacy Initiative Karachi
Jul 10, 2019 TCS Group Financial Literacy Initiative Karachi
Jul 9, 2019 Efu Insurance Financial Literacy Initiative Karachi
Jul 4, 2019 Atlas Honda Financial Literacy Initiative Karachi


The Default and Arbitration Wing at Pakistan Stock Exchange Limited [“PSX”] (formerly: Karachi Stock Exchange Limited)

The Pakistan Stock Exchange Limited (formerly: Karachi Stock Exchange Limited), being the frontline regulator, plays a proactive role in ensuring that investors’ interest remains protected. Securing the interest of small investors is of prime importance to the Pakistan Stock Exchange Limited (formerly: Karachi Stock Exchange Limited).

In order to keep a vigilant eye on investors’ issues and to provide a platform to the general public for voicing their concerns, Default and Arbitration Wing within Regulatory Affairs Department of Pakistan Stock Exchange Limited (formerly: Karachi Stock Exchange Limited) has been set up.

The Default and Arbitration Wing is responsible for ensuring that grievances/ complaints of the general public concerning investment and trading of securities are heard and redressed, in a quick and efficient manner. This Wing is also responsible for proposing disciplinary actions against defaulting brokers.

Since 2008, this Wing has been working under the supervision of General Manager/ Chief Compliance Officer and has recommended disciplinary actions such as, suspension /expulsion/ forfeiture of membership/ TRE Certificate of 14 Brokerage Houses of Pakistan Stock Exchange Limited (formerly: Karachi Stock Exchange Limited) and settled claims valuing Rs.2.6 billion transparently.

This Wing liaises with Securities and Exchange Commission of Pakistan (SECP), National Accountability Bureau (NAB), Federal Investigation Agency (FIA), Prime Minister’s Inspection Commission (PMIC), Federal and Provincial Ombudsman Offices in the matter of complaints lodged against the Member/ TRE Certificate Holders of the Exchange.

List of Permanent Arbitrators Panel

Panel of Senior Management staff of the Exchange

This includes senior members of PSX Management. One senior member is nominated by CRO in consultation with the Managing Director-PSX for constituting sub-panel of arbitrators.

Panel of Industry Experts

Panel of TRE Certificate Holders

List of Brokers failing to comply with the Awards/Orders of Arbitrators

Status Report of Investors’ Complaint

List of Delinquent Clients

System Auditor Panel

Auditor Panel IBTS

Lodging a Complaint

Online Claim Registration Form

How fo fill E-Claim Form

Claim Form

General Instructions for complaint registration

A guide for investors - Lodging complaints against PSX Members

Enclosures (for individuals):

  • Attested copies of National Identity Card of the applicant.
  • Attested copies of National Identity Card of the Joint Holders and or Nominee(s) (if applicable)
  • Attested copies of passports of the applicant, Joint Holders and or Nominee(s) (in case of non-residents)
  • Copy of the letter of authorization from the Account Holder(s) of the person authorized to trade in my/our accounts (if other than the account holder).
  • A list of Transaction fee, Commission to be charged by the Broker and other CDC charges to be levied.

Enclosures (for corporate entities):

  • Certified true copy of Board Resolution (specimen provided as per Annexure-A below).
  • Certified true copies of Memorandum & Articles of Association.
  • List of authorized signatories.
  • List of nominated persons allowed placing orders.

You can invest and trade in the stock market through TREC (Trading Rights Entitlement Certificate) holders/ brokerage firms recognised by PSX and licensed by the Securities & Exchange Commission of Pakistan (SECP).

You must shortlist a number of brokerage firms based on your individual preference. You must talk to the shortlisted firms and make your final selection based on your requirements. You may select your brokerage firm depending on:

  • Ease of communication & understanding of your defined investment objectives.
  • Availability of research material.
  • Availability of online trading facility.
  • Provision of trade confirmations.
  • Brokerage charges levied.
  • Physical proximity to your work-place or residence.

Why Save & Invest:

You want to live your life and follow your dreams. We all have a list of things that we want to achieve in our lives which require money to attain them. These may include goals for the near future like:

  • Planning the next vacation
  • Buying a home theater
  • Planning a destination wedding
  • Renovating your house
  • Upgrading your car

There is also a list of things you have to do in the distant future. These life goals may include:

  • Children’s college and university education
  • Investment for retirement
  • Entrepreneurial set-up
  • Buying your own house

All these life goals are achievable if you plan well, save early and invest prudently

While planning our investments we must also account for the unforeseen and emergency situations we may be faced with. Life is unpredictable and we can come across any situation like:

  • Severe/ terminal disease
  • Accidents
  • Loss of employment or business downturn

All the above need planning our investments. In order to invest, we begin with savings. We must invest our savings to ensure:

  • We beat the effects of inflation which eats up the value of our money.
  • We multiply/ increase the value of our money saved instead of leaving it idle

If you have thought of all of the above, Congratulations - You are ready to save and invest!


You can start saving as early as possible. Perhaps a chunk of your salary should be saved every month until you have enough to invest; a rule of thumb is to save 20% of your income. At the same time, if you have family support or other sources of income, a monthly addition of these funds can definitely help you save more until you have enough funds to start investing.


There are many savings & investment plans and products available in the market to choose from. If you keep your money in a bank account, you will get nominal returns on your savings. However, you are bound to get higher returns and cushion yourself against risk if you can invest your savings in a diversified portfolio of different investment vehicles such as:

  • Bonds
  • Treasury Bills (T-Bills)
  • Term Finance Certificates (TFCs)
  • Mutual Funds
  • Stocks


It is always a good idea to invest your money where you get good returns.

The stock market is one such avenue where there is good upside potential, historically, and where the returns have been higher than those from other investment avenues. Investing for the long term is a better option than investing for the short term in the stock market. It will not only allow you to compound your earnings but will also enable you to earn dividends which can be re-invested in the stock market, thereby increasing your earnings. So you must focus on compounding your earnings, reinvesting your dividends, and achieving capital gain.


By purchasing shares of the selected companies, you build your portfolio of stock investments. This portfolio is formed and selected on the basis of:

  • Company
  • Sector
  • Returns you are expecting
  • Risk capacity (how much can you invest in spite of market volatility)
  • Risk tolerance (how much market downturn and volatility can you sustain)
  • Payouts (dividends or bonus shares)
  • Any other considerations you may have according to your stock investment preferences

By purchasing the shares of a company, you become a shareholder of that company and are entitled to dividends and other payouts such as bonus or right shares issued by the said company, along with the advantage you can have of capital gain from increase in price of the shares.

If you have decided to invest in the stock market, then it is a decision well worth taking. Consider this that Pakistan Stock Exchange has performed better over the last several years, above and beyond other investment vehicles available in the country

Returns earned from the Stock Exchange as compared to other asset classes over the ten year period, Mar 2010 to Mar 2019:

KSE 100 Index stocks provided compounded annual returns of 15.13%* over the last 15 years Dec 2003 to Dec 2018. These figures compare fairly well with other avenues of investment in Pakistan.

The fact that the Pakistan Stock Exchange has given good returns historically, it is safe to say that investment in stocks in Pakistan Stock Exchange may well be worthwhile for the long run


The stock market is a place where companies list themselves to make their shares available to a broad range of investors to purchase these shares. You, as an investor, have the option to choose from multiple stocks of different companies to buy in order to build your investment portfolio. The share prices of the shares listed on the Stock Exchange fluctuate according to the buy & sell transactions taking place.



The main purpose of the stock market is raising of capital through investment in shares of listed companies. Listed companies are those which issue shares in the stock market to raise capital. This is done either through an Initial Public Offering or Rights issue.

An IPO or Initial Public Offering (Primary market) is the issuance of shares by a company in the stock market in order that its shares are purchased by the general public. Once the IPO has taken place, the shares continue to be traded in the stock market (Secondary market), changing hands between buyers and sellers.

Another way a company raises its capital is by issuing right shares at a certain price to existing shareholders. A shareholder interested in purchasing the right shares may do so if he deems it fit.


Pakistan Stock Exchange consists of a list of 546 companies in 35 different sectors or industries. The total Market Capitalisation (volume of outstanding shares times share price) was Rs 7.692 Tn as of Dec 31, 2018.


Index is a grouping of selected companies’ stocks according to certain financial parameters in order to measure the performance of a section of the stock market.


There are seven Indices listed on PSX which are:

  • KSE 100 Index
  • KSE All Share Index
  • KSE 30 Index
  • PSX-KMI All Shares Index
  • KMI 30 Index
  • BKTI (Tradable Banks Index)
  • OGTI (Tradable Oil & Gas Index)


For those investors who want to invest in Shariah compliant companies, there are listed companies on the Stock Exchange which are Shariah compliant. The PSX-KMI All Shares Index & the KMI 30 Index (KMI: KSE-Meezan Index) represent listed companies which are Shariah compliant. There are more than 200 companies listed on the PSX-KMI All Shares Index. The PSX-KMI All Shares Index & the KMI 30 Index were developed by PSX and Meezan Bank Limited. The listed companies’ Shariah compliance status is based on certain technical parameters and specifications as approved by a Shariah Board. In case of KMI 30 Index, it was approved by Shariah Supervisory Board of Meezan Bank Ltd., chaired by eminent Shariah scholar Justice (Retd.) Mufti Muhammad Taqi Usmani.



A basic guideline is to understand what you really want from your stock investment

  • Do you want to invest for the short term (1-3 years), medium term (3-5 years) or for the long term (5 years or more)?
  • Do you want to invest for dividends or for capital gain or for both?
  • How much risk can you take in terms of market downturns?

These are the basic questions you must address before investing

Optimally, you may want to invest in stocks for the long term, in order to earn dividends (periodically, through dividend yielding stocks) and for capital growth (gain in share price) over a number of years


As mentioned earlier, it is important to have a diversified portfolio of investments. You can have a diversified portfolio of stocks in order to cushion the effects of market downturns & volatility and to keep your total investment relatively secure.

You can diversify your portfolio by

  • investing in different products listed on the Stock Exchange such as stocks of listed companies, T-bills and mutual funds
  • Investing in stocks on the basis of different industrial sectors or their market capitalisation
  • Investing in stocks based on shares that give dividends or shares that provide for sufficient capital gain or both
  • Investing in stocks with different risk/ return levels. Some providing greater returns while others providing less returns. At the same time, the risk level of former will be greater than that of the latter


You must evaluate how much risk you can take/ what is your risk tolerance level if the market takes a downturn.

  • If you are risk-averse, your investment portfolio of stocks should be passive. In this way, you will be assured of receiving a return at market risk level.
  • If you are less risk averse, your investment portfolio can be a combination of stocks which provide for returns at market risk level and above market risk level
  • If you are investing as an aggressive investor, you can invest in stocks which provide for higher returns reflective of higher than market risk

Having a balanced portfolio with different market risk levels of shares and their returns is usually a good combination to build a portfolio of stocks.

You must also understand your risk-taking capacity. How much are you able to invest in the stock market in the face of the downturns and volatility it is undergoing?


In order to select the companies you want to invest into, you may want to look at:

  • The fundamentals and financials of the companies
  • The volume of activity in the stock market
  • The prevailing share price
  • The Price to Earning ratios (P/E)
  • The Earning per Share (EPS)
  • The indices in which the companies are listed (are they blue-chip KSE 100 Index companies?)
  • The annual payouts given by the companies
  • The industry/ sector performance of the companies

The above are some of the guidelines you may want to go by in order to select the companies you want to invest into.


A lot of investors are usually confused when to enter the market and when to exit it. It is a safe proposition to enter the stock market when the Price to Earning ratios are low and the stock market is in an oversold position. Similiarly, it may be profitable to exit the market when the opposite conditions are true. But, as a general rule, it is not when you enter or exit the stock market, but how long you can stay in it.


After the selection of your brokerage firm, you will open a Brokerage Account. You must ensure that the said Account is opened in your name. You will be given a Client Identification Number or an Account Number against this account. Read the terms & conditions prescribed in the Account Opening Form and make sure that they match with the Standard Account Opening Form available on the PSX website.

Subsequently you will open a CDC Sub Account. The CDC Sub Account is the account through which you can actually trade in the stock market.

You are also encouraged to open a CDC Investor Account. This account is opened at the CDC, thereby adding to greater safety and individual custody of your shares.

You must make sure that you are assigned a Unique Identity Number (UIN). It is this number against which all your brokerage accounts and transactions will be recorded.

You will also need to deposit initial funds to purchase shares. Make sure that it is not a cash deposit.


Once you have decided which companies’ shares to buy, you should place your orders through your stock-broker (or through the online application provided by your brokerage firm)

After placing the order and execution of the same, you should get a Trade Confirmation against your executed order.


The shares purchased or sold are settled (payments made or received) through NCCPL (National Clearing Company of Pakistan Limited). The exchange of shares takes place through the CDC (Central Depository Company Limited). These two organisations and the brokerage firms/ TREC holders form the major part of the ecosystem of PSX.


Many brokerage firms offer Online Trading facility for its customers. This allows you as an investor to trade by yourself on the Stock Exchange through the online application or software.


There are several taxes and charges applicable on shares trading at PSX; the basic ones are listed as follows:

CGT (Capital Gains Tax) [Tax Return Filers: 15%, Tax Return Non-filers: 20%], Brokerage Commission [Varies amongst brokerage firms], CVT, IPF, SECP Fee etc.


  • Define your investment objectives.
  • Shortlist a number of registered and licensed brokerage firms based on your preferences.
  • Select a brokerage firm that fits your requirement.
  • Open a Brokerage Account, CDC Sub Account and a CDC Investor Account.
  • Deposit funds in your account through cheque.
  • Select the companies to invest into based on some or all of the parameters mentioned in the Basic Guidelines for Stock Investment, your preferences and discussing the same with your stock-broker. Thereby building your portfolio.
  • Start investing.

To help you safeguard your interest and to avoid complaints against the stock-broker, here are some easy tips:


  • Before selecting a brokerage firm, visit the offices of a few of them to observe their business practices. Try to gauge the reputation of the brokerage firm by talking to people you meet.
  • Make sure that the brokerage firm and its branch(es) is/ are registered with the Securities & Exchange Commission of Pakistan (SECP).
  • Get clear information on the commission rates and services provided and compare these with those of other brokers.


  • You would need to open a Brokerage Account with the brokerage firm. Subsequently, you would also need to open a CDC Sub Account/ CDC Investor Account. It is important that you open the account(s) in your name.
  • Thoroughly read and understand the terms and conditions of the form of the Brokerage Account. Strike out any inapplicable clause and sign the same. Get the deleted clauses signed by the brokerage firm as well.
  • A CDC Investor Account is more secure than a CDC Sub Account; hence more preferable. You stay in control of your securities because they can only move once you give a transaction order.


  • Obtain your Client Identification Number or Account Number as assigned by the brokerage firm.
  • Obtain your Universal Identification Number or UIN issued by the National Clearing Company of Pakistan Limited (NCCPL).
  • Instruct your stock-broker in writing to always enter the Client Identification Number & UIN in the trading system of the exchange while executing your trades. This would help in setting an audit trail oli trades made on your account.
  • Make sure that all receipts/ confirmations etc. are issued/ made in the name of the brokerage firm on their stationery bearing their name.
  • Obtain periodic statements from your brokerage firm to keep a check on your trade positions and account balances. Also get a periodic Sub-Account statement from the Central Depository Company to verify your securities and their movement.
  • Make sure to receive and check your Trade Confirmations against any stock trades executed, from your brokerage firm.


  • Try to place your trade orders through one person rather than through several, in order to reduce chances of any misunderstanding.
  • Ensure that every time you buy shares, you get them transferred to your CDC Sub Account/ CDC Investor account on the settlement day only.
  • In case of any discrepancies, contact your stock-broker immediately. Don’t make simplistic assumptions or leave things to chance.


  • Define your investment objectives well and be clear of your risk-tolerance threshold and risk-taking capacity.
  • Know your financial capacity and needs well. Stock prices keep falling and rising. Losing money in a stock trade is not your stock-broker’s responsibility. Stand by your decisions.
  • Avoid discretionary trading accounts whereby the brokerage firm is given the freedom to execute trades for you.

Pakistan Stock Exchange has embarked on a Financial Literacy Initiative to educate potential investors about investment basics, financial planning, and stock market investments. The Initiative seeks to educate the general public about defining their investment objectives, what to expect from the stock market, begin investing in the stock market, securing their brokerage account, dos & don’ts of investing in the stock market, and considerations while investing. The Initiative also seeks to educate the general public about the operational, strategic and regulatory developments taking place at PSX.

For any further information and queries regarding the Financial Literacy Initiative or for arrangement of Financial Literacy sessions for your organization/ institution, submit your query by clicking below.

Foreign persons and institutions as well as non-resident Pakistanis can invest in securities listed on Pakistan Stock Exchange. They can benefit from potential growth opportunities available through investing in the Exchange, . For non-resident Pakistanis, investing in PSX is specially an attractive venture as it will enable them to benefit from the competitive returns from the Pakistani Capital Market while being stakeholders in their homeland’s economy. For foreign investors, the benefits are equally attractive and competitive as Pakistan’s stock market has consistently performed better than several regional exchanges and other emerging markets over a period of several years.

Foreign investors are considered at par with the local investors at PSX and they can acquire 100% of the ownership in all companies except the restricted industries. There is no extra taxation for foreign investors and they are allowed repatriation of profit and investment with the approval of State Bank of Pakistan (SBP).

Foreign persons/ institutions/ non-resident Pakistanis can invest in PSX through Foreign Portfolio Investment (FPI) scheme. This scheme allows investors to invest into various instruments such as equities, government bonds, and TFCs. Under this scheme, it is mandatory for a foreign investor to open a Special Convertible Rupee Account (SCRA). SCRA allows for remittance of funds to & from the account for purchase and sale of securities by the foreign investor. There are two ways a foreign investor can invest on the Pakistan Stock Exchange:

  • A foreign investor can contact a brokerage firm directly who will facilitate their Brokerage Account/ CDC Sub-Account and their Special Convertible Rupee Account (SCRA). A foreign investor can also directly contact a scheduled bank for opening their SCRA but they will have to contact a brokerage firm anyway to invest in the Stock Market. Investors are well advised to also open a CDC Investor Account directly with the CDC for direct control, safe-keeping and custody of their shares
  • Another way a foreign investor, particularly Foreign Institutional Investors, can invest on PSX is by approaching Custodial Service Providers in Pakistan (either directly or through Global Custodians & International Broker Dealers). A Custodial Services Provider will facilitate opening of two accounts, Cash Account (Special Convertible Rupee Account-SCRA) and Securities Account. Both these accounts are linked and under the title of the Account Holder/ foreign investor. SCRA allows for remittance of funds while the Securities Account is credited with securities purchased and debited with securities sold. This account is linked to the CDC Sub-Account which enables a foreign investor to transact on PSX via its stock-broker who executes the trades on the investor’s behalf. A FII will need to contact a brokerage firm directly.

A Centralized Customers Protection Compensation Fund (CCPF), formerly known as Investor Protection Fund (IPF), has been established and operated in accordance with the Customers Compensation Fund (Establishment and Operations) Rules, 2017 and Centralized Customer Protection Compensation Fund Regulations, 2017 promulgated by the Securities and Exchange Commission of Pakistan.

The sole mandate of CCPF is to compensate customers of a defaulter stock-broker up to a maximum of PKR 500,000 per claimant whose claim has been admitted by the Pakistan Stock Exchange (PSX).

The Claim invitation process initiates upon declaration of the stock-broker as defaulter by PSX. A customer wishing to file a claim against the defaulter stock-broker can do so by contacting the Regulatory Affairs Division (RAD) of PSX. The ensuing process is as follows:

  • The Default Committee is constituted by RAD comprising industry experts, senior management personnel of PSX and TREC Holders not exceeding one-third of total such committee members.
  • A notice of default of a stock-broker is issued by PSX on its website informing the public about the declaration of a stock-broker as a defaulter.
  • A public notice is issued on the same day on PSX website inviting the public to file claims against the defaulter stock-broker. Such notice is also published in at least two widely circulated newspapers of Pakistan in English & Urdu languages.
  • The Default Committee dispatches the Investor’s Complaint/Claim Form (available on PSX website) at the registered address of each customer of the Defaulter available with CDC and /or NCCPL.
  • To ensure in-depth verification of filed claims and to maintain transparency and independence, PSX engages an audit firm to verify the genuineness of claims of the aggrieved parties.
  • The approved claims are settled from the funds made available from the disposal of assets of the defaulted stock-broker under custody with PSX. The claims still remaining unsatisfied are then paid from CCPF upto a maximum limit of PKR 500, 000 in the manner provided in Chapter 24 Chapter 24 of PSX Regulations.

What is Stock Challenge

Stock Challenge is a virtual trading competition among the students of Karachi with an aim to provide the youth the awareness of Pakistan’s Capital Market’s structure and the Training of the Investment Activities. The competition is done through the PSX Virtual Trading App, available on Android and Desktop.

This program comprises of multiple sessions, where students will use Stock Challenge Application, developed by PSX to give real-time experience of investment in PSX. In addition to that, students will be provided with guidance through study materials, live webinar sessions, & chance to interact with selected brokerage houses & learn about investment basics, financial planning, and stock market investments. This program will help PSX gain trust of thousands of families & potential investors while also providing them valuable insights and learning about investment in the stock market. It will also provide the audience an opportunity to discuss matters of mutual concern with representatives of Brokerage houses & PSX.

During Stock Challenge, the participants will be provided with the PSX’s Official Virtual Trading Application and they will simulate the inactivity. It will also serve its participants with multiple seminars about the eco system of Pakistani Capital Market, other connected stakeholders and some other relevant information and trainings.

Who can take part in Stock Challenge Competition?

Anyone enrolled in School, College & University can register for the Stock Challenge Competition

How Can I Participate?

You can register via PSX Virtual Trading App, once the registration in complete you will receive the registration email.

Do check your junk email if you are already logged in to an account, just log on to app and start your own portfolio and trading.

Is there any educational value to the contests?

Of course! Everything we do is centered on education. The Stock Challenge gives continuous updates on our portfolio holdings and management. Our team is trying their best to give new investors an idea of what kinds of things to look for while maintaining a portfolio.

We also add educational articles, videos and more to help all of our participants learn via our social media page and corporate website.

During Stock Challenge, the participants will be provided with the PSX’s Official Virtual Trading Application and they will simulate the inactivity. It will also serve its participants with multiple seminars about the eco system of Pakistani Capital Market, other connected stakeholders and some other relevant information and trainings. 


Stock Challenge 2019

  • To enter the Stock Challenge, Applicants must be 18 years old or over on 30th June 2019. Applicants must provide proof of age in the form of a CNIC or Passport copy.

  • The Stock Challenge 2019 is for University students enrolled for Bachelors or Master Program.

  • Use of a false name or address will result in disqualification. Incorrectly completed or misleading applications will be disqualified as well.

  • Registration can be done via Virtual Trading App

  • Registrations, other than the event participants are not allowed.

  • Each individual is allowed only one portfolio in Stock Challenge competition.

  • The Winners and Runners Up shall be determined via. The decision of the Judges will be final, and no correspondence will be entered into.

  • A list of the available prizes will be announced during the competition. The Stock Challenge Team will have sole discretion on the final allocation of prizes.

  • Prizes are not transferable to another individual.

  • The Applicant should receive a confirmation email upon the successful submission of the Application Form. If no confirmation is received within 24 hours of submission of the application, the Applicant is advised to contact the Stock Challenge Team using the contact page on the PSX web site.

  • We may ask winners to provide a photo ID upon claiming their prize as part of our auditing process.

  • Trading can be done only during the trading hours only. However, students at their own risk can short sell.

How the winner will be decided?

Winner will be decided based on highest capital gain during the event and portfolio size. Top performers will be announced by the end of the competition. Furthermore, a winner from each renowned university will also be announced followed by two runner ups. Participants will also receive a participation certificate.

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