How To Open Stock Exchange Account In Pakistan

What is a stock exchange account? How can we open a stock exchange account in Pakistan? What are the terms or steps to register in the Pakistan stock exchange market? Here we will discuss the answer to all these questions related to a stock exchange account.

A stock exchange is a market where people and different business companies sell their shares physically and online. The third-party can easily purchase the shares from these people or companies.

For all this work, a stock exchange account is required, through which we can do all our work. Many companies provide all their services related to the account opening in both ways physically or online. Most of the services are available online now. Online services help people to do their work from home.

Now we will discuss the steps and requirements for opening a stock exchange account in Pakistan or the process of registration on the Pakistan stock exchange.

Documents Required for opening Stock Exchange Account in Pakistan

Following are the documents that you must present while you want to open an account at the Stock Exchange of Pakistan.

(جاری ہے)

Copy of CNIC
Current salary slip
Utility bill's copy
Bank statement
CNIC copy of close relation (blood relative like father, brother, etc.)
The cheque for the deposit

Simple Steps to Open Account at Pakistan Stock Exchange

By following the simple steps given below, you can easily invest your funds at Pakistan Stock Exchange.

First, define your investment objectives.
Shortlist some licensed and registered brokerage firms based on your preferences.
Choose a brokerage firm that meets your requirement.
Open a Brokerage Account.
Also, open a CDC (Central Depository Company) Sub Account and a CDC Investor Account.
Deposit funds in your account through cheque instead of cash amount.
Select your preferences based companies to invest in some or all of the mentioned parameters in the Basic Guidelines for stock investment. And discuss all with your stockbroker. After that, they will make your portfolio.
Start investing in the stock market.

After the simple explanation of account opening, we will now discuss registration on the Pakistan stock exchange in detail with complete guidelines. It will be helpful for all beginners in the stock market.

Step 1: Find a Stock Broker

A stock exchange account is required for investment in the stock market. For it, you need to select a stockbroker first. Tell him/her all your investment intentions and plans for the future. After that, the stockbroker opens your stock brokerage account.

Your stockbroker connects you to the stock exchange market. It provides you approach to transacting and investing on the stock exchange. In other words, your stockbroker is your middle man.

In Pakistan, there are many stock brokers available at PSX. After shortlisting some brokerage firms, you can select your stockbroker based on your requirements and preferences.

After the process of shortlisting, you can choose your brokerage firm based on:

Understanding your investment objectives and ease of communication.
Standard of investment advice.
Provision of trade confirmations.
Availability of online trading facility.
Availability of research material.
Impose brokerage charges.
Physical closeness to your residence or work-place.

Step 2: Open Your Brokerage Account

Once you choose your stockbroker, the second step is to fill out a form SAOF (Standardised Account Opening Form) for your brokerage account. After completing the form, all the documents mentioned above; will also be submitted.

When you fill the form, you need to make sure that the account is opening in your name. Against this account opening, you will have to give an Account Number or a Client Identification Number. It is the number that will record all transactions of your brokerage account. Make sure; it matches the PSX website form by reading the terms and conditions listed in the Standard Account Opening Form.

After this procedure, you will open a CDC (Central Depository Company) Sub Account. It is an account through which you can invest in the stock market or a part of the stock exchange ecosystem. In another way, you can save your shares in this account for transaction purposes. It allows for the exchange of shares when a trade is accomplished in the stock market to take place through it.

You are also stirring up to open a CDC Investor Account. This account is opened in the CDC for protection and individual custody of your shares.

Step 3: Deposit Funds to Your Account

To start investing in the stock market or to purchase shares, you need to deposit initial funds. In your first term, deposit the amount through a cheque instead of a cash deposit.

You are also advised to keep yourself informed of taxes on transactions through the stock exchange. Besides, you have to be aware of the Central Depository Company, Securities and Exchange Commission of Pakistan, National Clearing Company of Pakistan Limited, and Federal Board of Revenue.

Step 4: Get Confirmation by Placing Your Order

After opening your account and depositing money in it, you can start investing in the stock market. When you plan to buy shares of a company, you can place an order through your stockbroker. You can also do it by the online application, which is provided by your brokerage firm.

This whole process is necessary so that you can verify your Trade Confirmation from your stockbroker in case of your buy and sell order instructions. You are also permitted to receive your account activity from your stockbroker. You can check all your account ledgers and statements.

If you want to give someone else the option to run your account, you need to submit a power of attorney or a letter of authorization for that person. After all that, this person will be able to operate your account.

Conclusion

These are all the simple and necessary steps to open a stock exchange account in Pakistan. These basic requirements are to start investing in PSX. A person who does not know how to register himself in the Pakistan stock exchange can get all information from this article.

After reading and implementing all the steps given above, now you are ready to trade shares at PSX. We hope it will be a profitable journey for you.