Investor Guide>>Trading
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Agreement with constituents
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Choose the broker you want to trade with and enter into a broker-client
agreement. You should carefully read the various terms and
conditions and understand their implications before entering into
an agreement with a member/broker. This agreement is mandatory.
The features of this agreement which reduce the chances of any
dispute are terms and conditions which relate to order or trade
confirmation, brokerage charged by a broker and delivery of
securities and funds.
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What precautions are to be taken in
signing a broker-client agreement?
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Check whether the name of both parties
have been mentioned in the agreement
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Check whether both the parties or their
representatives have signed on all the pages of the agreement.
Also check that the witness of both the parties have signed
and put their names against their signature.
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Check whether the Trading member's representative have the authority to
sign the agreement.
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How do I execute an order on the ISE?
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Place orders with the broker preferably in writing. Orders over the
telephone/fax are also acceptable. Ask for the order confirmation
slip on the day the order is placed. Ask for trade confirmation
slip on the day the trade is executes. Ensure smooth settlement of
the trade by delivering securities and/or funds time to your
broker.
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Does the ISECTS give lower priority to
small orders as against big orders?
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In fact you will be surprised to know that the ISECTS treats all
quantities alike. For example if you have placed a buy order for
5000 shares of company `A' @ Rs. 20/- per share ahead of another
investor who has placed buy order for 10,000 shares of company `A'
@ Rs. 19/- then your order will get priority over the big order.
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How does one ascertain the correct rate
at which transactions have taken place?
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Brokers are obligated to give their clients a trade
confirmation slip the moment a trade takes place. This slip
carries the rate at which the trade takes place. At the end of the
day the broker has to issue a computer generated statement which
separately shows the rate at which the trades take place along
with the brokerage rate.
It will be the responsibility of the investor to collect the
purchase/sale confirmation contract from the broker's office
within 2 working days of the date of execution and account ledger
report within 3 working days after the last trading day of the
week.
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How do I know my broker is giving me the
best price?
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The ISECTS matches orders in such a way that the order is
executed at the best possible price available on the system. This
is because the process of matching buy and sell order is done by
the computer.
After all this if I still have a problem regarding the prices,
deliveries or any thing pertaining to my trade, is there somebody
I can approach?
The Exchange has a Complaint Cell where you could call in case you
need any clarification. Further in case of disputes between
brokers and clients, there is Floor Committee which is precisely
the Forum for amicable settlement of dispute. Nevertheless, if a
dispute is not resolved amicably, there is a procedure for
arbitration.
In the event of any dispute relating to the trade all you have to
do is to file your complaints to the Floor Committee of the
Exchange.
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What are the documents you should
receive from your broker and when?
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i) Order confirmation slip or Trading Statement.
After the order has been placed.
ii) Trading confirmation slip.
After the trade has been executed.
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What are the points to be checked by an
investor to check the validity of documents?
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Name and address of trading member, their ISE registration number, detail
of trades like order number, trade number, trade time, scrip,
rate, brokerage, settlement date and signature of authorized
signatory.
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What is financing and how it is
different from normal stock exchange transaction/trade and whether
it is legal under stock exchange regulations?
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Financing is referred to as a transaction whereby an investor
invests money with the broker for a periodic fixed return.
It is different from the normal stock exchange transaction/trade
on two counts:
1. The money is not given for
investment in shares.
2. It guarantees fixed return (where
as the exchange transactions does not guarantee any such fixed
return)
Financing is not allowed under the regulations of the Islamabad Stock
Exchange. Investors are therefore cautioned not to enter into
transaction involving financing.
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