A stock exchange is a market or bourses market which provides trading facilities for brokers and traders. These stock brokers and traders trade share of the listed companies and other financial instrument such as term finance certificates and derivatives. Stock exchange also provides facilities to issue, redemption of shares and payments of dividends. PSX is a modern market where trading takes place through electronic trading system called Karachi Automated trading system (KATS).
Stock Exchange Membership
The Exchange Membership is composed of following types of members;
- Commission Brokers
- Floar Broker
- Registered Traders
These are the members who purchase memberships of the stock exchange. These specialists are normally investment bank or brokerage houses. The specialist is the one having enough information about the stock. Major examples include JS bank and Alfalah bank etc.
Commission brokers are the employees of the investment bank and their job is to sell or buy stock for their customer. They basically act as a third party or a bridge between the company and the customer interested in the stock.
These are the independent members of an exchange who act as a broker for the members of the stock exchange and they do not act as a third party or a bridge between the company and the customers rather they act as a bridge between the company and the members of the stock exchange. They act as a broker for specialist.
Registered traders are the members of the stock exchange who purchase or sell shares from their own accounts. They are the one who first get registered with the stock exchange and then open an account and then they sell shares directly from their accounts.
November 22, 2018