Glossary · Regulation & Institutions
Brokerage Firm
A licensed financial intermediary authorised by the SECP to execute buy and sell orders on the Pakistan Stock Exchange on behalf of clients.
01—What is Brokerage Firm?
The definition — and what it means in practice.
A brokerage firm is a licensed financial intermediary authorised by the Securities and Exchange Commission of Pakistan (SECP) to execute buy and sell orders on the Pakistan Stock Exchange (PSX) on behalf of clients. It provides the trading access, order handling, and client services needed to route instructions to the market. Depending on its licence permissions, it may also facilitate services linked to settlement and securities custody through the market infrastructure.
For an investor, the brokerage firm is the main point of access to the PSX. It affects how efficiently your orders are placed (for example, market versus limit orders), what costs you pay in brokerage commission and charges, and how clearly you can track holdings and transactions. It also matters operationally: trade confirmations, statements, and how corporate actions (like dividends and book closures) show up in your account all flow through the brokerage relationship.
If you ask a broker to buy 100 shares at Rs 50, the brokerage firm places that order on the PSX and your shares are recorded electronically after settlement.
- A brokerage firm is an SECP-licensed intermediary that executes PSX orders for clients.
- Your trading experience depends on its order handling, reporting, and support processes.
- Costs include brokerage commission and other applicable market charges.
- Brokerage services connect your trades to settlement and electronic shareholding systems.
02—How brokerage firm works on the PSX
The Pakistan-specific rules, conventions, and numbers.
On the PSX, brokers must hold a Trading Right Entitlement Certificate (TREC) licence. The PSX itself was formed in 2016 by merging the Karachi, Lahore, and Islamabad stock exchanges and is regulated by the SECP. When you place an order through a brokerage firm, the trade is executed on the exchange, clears through the National Clearing Company of Pakistan Limited (NCCPL), and shares are held electronically at the Central Depository Company (CDC).
In practice, a PSX investor encounters their brokerage firm when opening an account and obtaining a Unique Investor Number (UIN), which every investor needs. Small investors may use a Sahulat Account, a simplified, low-documentation account type. After a trade, settlement is T+1 (one business day), so your broker’s processes and statements help you follow the timeline from execution to settled holdings and cash movement.
03—Common misconceptions
Where investors most often get this wrong.
My broker is the stock exchange.
The broker is an intermediary. The PSX is the marketplace where trades occur; brokers connect clients to it and execute orders on their behalf.
Once I trade, my shares are held by the brokerage firm.
In Pakistan, shares are held electronically at the Central Depository Company (CDC). Your broker facilitates trading and reporting, while the depository system records holdings.
All brokers offer the same service because the market is the same.
Execution happens on the same exchange, but brokers can differ in order tools, service quality, reporting, and how clearly they explain charges and settlement steps.
04—Using brokerage firm on BSL
Where this term shows up across the platform — with live data.
05—Frequently asked questions
What investors ask about brokerage firm on the PSX.
Frequently Asked Questions
Yes. A brokerage firm that executes Pakistan Stock Exchange trades is authorised by the Securities and Exchange Commission of Pakistan (SECP), and PSX trading access requires a TREC licence.
After execution on the PSX, trades clear through NCCPL and shares are held electronically at the CDC. Settlement is T+1 (one business day), meaning the transfer of securities and cash is completed on the next business day.
Yes. Every investor needs a UIN to trade in the PSX market. Your brokerage firm typically guides you through the account-opening steps needed to obtain it.
A Sahulat Account is a simplified, low-documentation account for small investors. It is opened through a brokerage firm and provides a streamlined way to access PSX trading within the market’s account framework.
A broker does not set market prices, but it does handle how your order is placed (such as a market order or limit order). Order type and how it is routed can affect the price you receive relative to the available bids and offers.
06—Related terms
Keep building the picture.
A licensed member of the stock exchange who executes buy and sell orders on behalf of clients and may also provide investment advice. All PSX stockbrokers must hold a valid TREC and be registered with the SECP.
The regulatory body responsible for overseeing Pakistan's capital markets, corporate sector, insurance industry, and non-banking financial companies. The SECP must license all PSX brokers.
The licence that authorises a brokerage firm to trade on the Pakistan Stock Exchange. All legitimate PSX brokers must hold a valid TREC issued by the PSX.
A unique identification number assigned to every investor registered on the PSX. Required to trade on the exchange. Issued by a licensed broker upon account opening.
The entity responsible for clearing and settlement of trades executed on the PSX. Ensures that both the buyer and the seller receive shares and payment upon settlement of the trade.
The institution responsible for maintaining electronic records of securities ownership in Pakistan. All PSX-traded shares are held in dematerialised form through the CDC. Investors access their holdings via a CDC Investor Account or through their broker's sub-account.
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