Glossary · Investing Basics
Securities
A broad term for financial instruments representing ownership or a creditor relationship, including shares, bonds, and other capital market instruments traded on regulated exchanges.
01—What is Securities?
The definition — and what it means in practice.
Securities are financial instruments that represent either ownership in an entity or a creditor relationship. Common examples include ordinary shares (equity) and bonds or other fixed-income instruments (debt). Securities are typically standardised and transferable, which allows them to be bought and sold. They may be traded on a regulated exchange or issued and held through established market infrastructure, depending on the instrument.
Securities matter because they are the building blocks of most investment portfolios. Each type of security carries different rights and risks: shares can offer dividends and potential capital gains, while debt securities generally prioritise periodic income and repayment terms. Understanding what kind of security you are dealing with helps you interpret prices, corporate actions, taxes, and settlement. It also clarifies what you actually own (or are owed) and how you can trade or transfer it.
A security is something you can invest in, like a share or bond; buying 100 shares means you own 100 units of that company’s equity.
- “Securities” is a broad umbrella term for tradable financial instruments.
- They can represent ownership (shares) or debt (bonds and similar instruments).
- Different securities come with different rights: dividends, voting, coupons, or repayment terms.
- Securities are usually transferable and priced by market supply and demand.
02—How securities works on the PSX
The Pakistan-specific rules, conventions, and numbers.
On the Pakistan Stock Exchange (PSX), the securities most retail investors encounter are listed shares. The PSX was formed in 2016 by merging the Karachi, Lahore, and Islamabad stock exchanges. It is regulated by the Securities and Exchange Commission of Pakistan (SECP). Trading and post-trade processes rely on established infrastructure: trades clear through the National Clearing Company of Pakistan Limited (NCCPL), and shares are held electronically at the Central Depository Company (CDC).
In practical terms, a PSX investor experiences “securities” through the lifecycle of a trade: placing an order with a broker (who must hold a Trading Right Entitlement Certificate, or TREC, licence), having a Unique Investor Number (UIN), and completing settlement. Settlement is T+1 (one business day). Many shares trade in standard board lots (typically 100 shares), and most listed shares have a Rs 10 face value, which affects how cash dividends are quoted.
Securities ownership also links to market rules and disclosures that can affect day-to-day trading. For most equities, daily price limits (circuit breakers) are set at ±10% or Re 1 around the previous close (LDCP), whichever is higher. Corporate actions such as dividends and other entitlement events are reflected through record dates and ex-dates, and taxes can apply to cash dividends through withholding based on filer status.
03—Common misconceptions
Where investors most often get this wrong.
A “security” only means a share on the PSX.
Shares are securities, but the term also includes bonds and other capital market instruments that represent ownership or a creditor relationship.
If I buy a security, I always get a fixed return.
Returns depend on the security type and outcomes. Shares may pay dividends but can also fall in value; debt securities depend on issuer terms and credit risk.
Securities are physical certificates I must keep safe.
On the PSX, shares are held electronically at the Central Depository Company (CDC), rather than as paper certificates.
04—Using securities on BSL
Where this term shows up across the platform — with live data.
- Browse listed Stocks.
- Filter and compare securities using the Stock Screener.
- Track overall market activity on the Market.
- Check upcoming entitlement timelines via Ex Dates.
05—Frequently asked questions
What investors ask about securities on the PSX.
Frequently Asked Questions
On the PSX, the term usually refers to listed shares that investors can buy and sell through licensed brokers. More broadly, securities include other instruments that represent ownership or debt, but retail activity on the PSX is commonly focused on equities.
Listed shares are held electronically at the Central Depository Company (CDC). When you trade, the clearing process runs through NCCPL, and ownership records are updated through the depository system rather than using physical share certificates.
To trade on the PSX you need a Unique Investor Number (UIN) and you place trades through a broker that holds a TREC licence. For smaller investors, a Sahulat Account is a simplified, low-documentation account option.
T+1 means the trade settles one business day after the transaction date. In practice, cash and securities are exchanged through the clearing and settlement process after you have executed a buy or sell order.
Cash dividends are subject to withholding tax in Pakistan. The withholding rate differs by income-tax filer status: 15% for filers and 30% for non-filers.
06—Related terms
Keep building the picture.
The market where long-term financial instruments such as stocks and bonds are issued and traded. The Pakistan Stock Exchange is Pakistan's primary capital market.
A unit of ownership in a company. Holding stocks makes you a shareholder, entitled to a proportional share of the company's assets and profits.
A fixed-income instrument representing a loan made by an investor to a borrower, typically a government or corporation. The borrower pays periodic interest and repays the principal at maturity.
A company whose shares are officially traded on the Pakistan Stock Exchange, following SECP and PSX approval and compliance requirements.
The process of completing a trade by transferring shares to the buyer and cash to the seller. The PSX has moved toward a T+1 settlement cycle, meaning most trades are finalised one business day after the trade date.
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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