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Transaction Types & Settlement Procedure

T + 2 or Regular Transaction

IGI Securities Limited offers regular transactions to its clients through the Pakistan Stock Exchange. Clients can buy any stock by depositing 100% cash to IGI Securities and can acquire the delivery of the shares in his/her CDC sub account.

In T+2 settlement system, transaction is settled on second day following the day of trade. If the client is unable to deposit the net required cash balance by last day of the settlement, his/her positions are squared automatically. Regular transactions are generally operated through cash accounts in which the amount deposited by the Account Holder is fully used. This means that the Account Holder can only buy shares equal to the funds deposited by him/her with the broker.

Transactions are settled on the second working day following the trade day through the centralized clearing-house. The clearing-house advises the financial obligations of each member/firm based on the transactions in various markets for the notified clearing period. It thereon issues instructions for payment and delivery of shares from and to the various members of the clearing house.

Futures Transaction

IGI Securities offers the facility of Future Contract Transactions to all its clients. A Future Contract involves purchase and sale of shares at some future date, at a price fixed today. Pakistan Stock Exchange has initiated one month future contracts for a list of securities, whereby monthly future contracts end on the last Friday of each month and are settled on the following Wednesday.

Trading in Futures Contracts started in July 2001 and currently a selected number of shares are available for trading on this counter. The contract is fixed for one month and is settled at the end of the period through the clearing.

T + 1 or Spot Transaction

Spot Transactions imply delivery upon payment. Normally in Spot Transactions, trade is settled within 24 hours.

Listed companies announcing the closure of their share transfer books to facilitate corporate actions, are traded as Spot five days before their closure date. Daily settlement of funds and shares is effected through the clearing-house.

Provisional Transaction

Provisional Transaction refers to the activity that takes place between the time a scrip / share is formally listed at the Stock Exchange and after its Initial Public Offering (IPO) has taken place and the subscriptions have been received from the prospective shareholders.

When the company completes the process of dispatch/credit of allotted shares to subscribers through the CDC, it is officially listed and placed on the T+2 counter. Trading on the provisionally listed counter then comes to an end and all the outstanding transactions are transferred to the T+2 counter with effect from the date of formal listing. Shares listed on the provisional counter can be purchased or sold by all IGI Securities clients.

Central Depository Company of Pakistan Limited

The settlement and custody of shares takes place through the Central Depository Company of Pakistan Limited (CDC)

CDC operates an on-line, real-time book entry and settlement of securities for the Pakistan Stock Exchange. Physical deliveries have been replaced by electronic shares by virtue of the Central Depository System (CDS). Currently, almost all trades are settled through this system.

The following types of accounts can be opened:

• Participant Account – for member/firms and large institutional investors
• Investor Account – for individual, retail and corporate investors
• Sub Account – for individual and corporate investors through the member/firm