Opening an Account

There are many forms of buying and selling in the market. But our main concern would be to work in shares of regular market, with minimal conditions as would be explained here on. As the market is digitized and every trade has to be in the online session, it is essential for an investor to have digital account.

For a new investor, it is mandatory for him to open up a sub-account (or a simple account) with a brokerage firm. Well we cannot name or advertise any brokerage firm here but it is a good practice to review all their facilities and options as a pre-qualification method. Choice of a broker is entirely up to you as you must first see the type of money the broker charges for your mode of transactions in the stock market.

The important list of things for opening a sub-account vary according to different brokerage firms but here are some basic one’s for you to follow:

      

        Attested copy of CNIC/NICOP of account holder

        Attested copy of CNIC/NICOP of joint account holder

        Copies of CNIC’s of witnesses

        Source of income/business evidence

       Bank account

         Form duly signed and verified

The broker on your behalf will apply for a CDC (Central Depository Company) account for your trading. Hence you will have two accounts, a local one with your brokerage firm and another one with CDC which is a regulatory authority as explained in the previous article. Moreover, your broker would demand of you to maintain a minimum amount of balance in your account. Other rules and regulations will be provided to you by your broker so need not to worry at all. The facilities provided by a broker would normally include telephone trading, computer terminal trading or even smart phone app trading, SMS alerts, account managing and statement regulations. As time passes by, advancement in this field has proved to be very fruitful as there was a time when trading was done physically but then by the use of computer and digital network, it now uses more advanced trading terminal and software.

However, to attract more clients towards their brokerage firm, they (just like commercial banks) offer many incentives and facilities to help out you with your work. Some may offer tips and market inside news to maximize your profit at the very beginning but that hasn’t been a very popular way of working and mostly has proven to be a very risky move as it is likely to get stuck in some share which has no return or solid background what so ever. But let us consider the main objective of a broker towards you. The firm has its main “account” in the stock market and is called a TRE (Trading Right Entitlement) certificate holder and that is the reason for which your account is called a “sub-account”. He is allowed to do transactions in your account upon your approval and is deemed accepted the main account holder in the market.

For more details or any querries on this or any topic of the post, feel free to post a comment.