Guide Series

Please go through the diagram below to see how a trade progresses from order to settlement.

1. Place your order

   Buy or sell through Rafi Online or your broker’s dealing desk.

2. Order routed to the exchange

   Your order is sent to the PSX computerized trading system.

3. Order matched and executed

   The exchange matches your order and you receive a contract note.

4. Trades cleared by NCCPL

   NCCPL nets purchase and sale quantities and the financial obligations for the notified clearing period.

5. Settlement on T+2

   For the T+2 / BO market, securities and funds are exchanged two days after the trade date.

6. Shares credited to your account

   Delivered shares are credited to your CDC sub-account and sellers receive their funds.

The Pakistan Stock Exchange (PSX) provides a marketplace where shares of listed public companies can be bought and sold, and where companies can raise capital — bringing companies and investors together in one place.

• Buy and sell shares of listed companies on a fair and transparent computerized market.
• Participate when companies raise fresh capital through the exchange.
• Hold your shares electronically in your CDC sub-account.
• Follow prices, market data and research through your broker.

PSX offers a computerized trading system to provide a fair, transparent, efficient and cost-effective market mechanism to facilitate investors. Settlement of these trades is carried out through the National Clearing Company of Pakistan (NCCPL).

For trading in T+2 / BO, Spot, Provisional and Deliverable Futures, settlement takes place on a netting basis for the notified clearing period: netting of purchases and sales in quantity, netting of financial obligations, and issuing deliveries as well as financial obligations of netted outstanding balances. Settlement of cash-settled futures and stock index futures is financial.

Benefit of the T+2 / BO settlement system: it reduces the time between execution and settlement of trades, which reduces market risk and, in turn, settlement risk, because the settlement cycle is shorter.

As part of its risk management, the Exchange has devised circuit breakers. These are limits on price movements and consist of an upper limit and a lower limit.

For share prices starting from Rs. 20.01 upwards, the upper limit or lower limit is +5% or -5% from yesterday’s closing price. For share prices ranging from Rs. 0.01 to Rs. 20.99, the upper limit or lower limit is fixed at Rs. +1.00 or Rs. -1.00 from yesterday’s closing price.