Glossary · Regulation & Institutions
Trading Right Entitlement Certificate
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.
01—What is Trading Right Entitlement Certificate?
The definition — and what it means in practice.
A Trading Right Entitlement Certificate (TREC) is the licence that authorises a brokerage firm to trade on the Pakistan Stock Exchange (PSX). It is issued by the PSX and is a basic eligibility requirement for a broker to place buy and sell orders on the exchange. A firm that does not hold a valid TREC is not authorised to conduct exchange trading on the PSX.
For an investor, a broker’s TREC is a simple but important legitimacy check. When you open an account and place orders, you are relying on the broker’s right to access the PSX trading system and carry out transactions that will later clear and settle. Understanding what a TREC is helps you distinguish PSX-member brokers from entities that may offer “stock trading” without being authorised to trade on the exchange.
A TREC is the PSX “trading licence” for brokers, so if a firm lacks it, it cannot legally place your buy/sell order on the exchange.
- TREC stands for Trading Right Entitlement Certificate.
- It is issued by the Pakistan Stock Exchange and authorises a brokerage to trade on the PSX.
- Every legitimate PSX broker must hold a valid TREC.
- A TREC relates to broker access to the exchange, not to a stock’s quality or risk.
02—How trading right entitlement certificate works on the PSX
The Pakistan-specific rules, conventions, and numbers.
On the PSX, trading is done through brokerage firms that are authorised to access the exchange. A TREC is the exchange-issued licence that grants that right, so it is directly tied to who can legally route orders into the PSX market. The PSX is regulated by the Securities and Exchange Commission of Pakistan (SECP), and trades clear through the National Clearing Company of Pakistan Limited (NCCPL), with shares held electronically at the Central Depository Company (CDC).
In day-to-day investing, you will most often encounter the term “TREC” when evaluating or onboarding with a broker for PSX trading, including when using simplified options such as the Sahulat Account. While your trades settle on a T+1 basis and require a Unique Investor Number (UIN), the broker’s ability to execute those trades on the exchange depends on being a valid PSX member via a TREC. It is a membership and authorisation concept, not a trading strategy.
03—Common misconceptions
Where investors most often get this wrong.
A TREC means the broker’s trades are guaranteed to be profitable.
A TREC only confirms the broker is authorised to trade on the PSX. It does not reduce market risk or ensure returns.
If I have a UIN, I can trade directly on the PSX without a broker.
A UIN identifies an investor for market participation, but exchange trading is executed through a broker. The broker needs a TREC to place orders.
TREC is the same thing as a company’s rights issue or ‘rights entitlement’.
Despite the word “entitlement”, a TREC is a broker’s trading licence. A rights issue is a corporate action by a listed company.
04—Using trading right entitlement certificate on BSL
Where this term shows up across the platform — with live data.
- Learn the main terms used by brokers in our glossary.
- Browse PSX-listed companies you can trade through a broker on the stocks page.
- Filter and compare shares using the stock screener.
- See live market boards and activity on the market page.
05—Frequently asked questions
What investors ask about trading right entitlement certificate on the PSX.
Frequently Asked Questions
TREC means Trading Right Entitlement Certificate. It is the PSX-issued licence that authorises a brokerage firm to trade on the Pakistan Stock Exchange.
Yes. All legitimate brokers that execute trades on the Pakistan Stock Exchange must hold a valid TREC issued by the PSX.
No. A TREC is an authorisation for a broker to access PSX trading. It does not remove price risk, liquidity risk, or the possibility of losses in the market.
No. A TREC is issued by the PSX and relates to exchange trading rights. The PSX itself is regulated by the Securities and Exchange Commission of Pakistan (SECP).
To place orders on the Pakistan Stock Exchange, trading is done through a brokerage firm that has the right to trade on the exchange. That right is provided by a valid TREC.
06—Related terms
Keep building the picture.
A licensed financial intermediary authorised by the SECP to execute buy and sell orders on the Pakistan Stock Exchange on behalf of clients.
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 sole stock exchange in Pakistan, formed in 2016 through the merger of the Karachi, Lahore, and Islamabad stock exchanges. Headquartered in Karachi, the PSX lists over 500 companies across multiple sectors.
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 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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