These procedures are formulated in accordance with the Regulation 4(c) of the Internet Trading Regulations of the Karachi Stock Exchange Limited dated July 02, 2012. This covers the following aspects with respect to clients’ access to the online trading (IBTS) system.
Agreement with the brokerage house
- Agreement with the brokerage house.
- Assigning of Trading Limits.
- Placement and Execution of Clients’ Orders.
- Mode and timing of reporting trade confirmation to clients.
- Margin Requirement and Margin Calls.
The clients who wish to trade online through internet trading facility of Abbasi Securities (Pvt) Limited will be required to open an account with the company by signing account opening and sub account opening form and providing requisite documents. Once the account is opened, the client will need to sign another form “Internet Trading Facility Form” to get the online access for trading. The terms and conditions in the Internet Trading Form constitute an agreement between Abbasi Securities and the client. After getting all the formalities completed, Abbasi Securities will forward login Id, Password and PIN code at the registered email address of the client.
Assigning of Trading Limits/Margins
According to the company’s policy and in view of the internet security concerns, the company usually does not allow clients to trade on margins through online (internet based) trading and most of the clients only allowed to trade against cash/credit in his account with the company. For selling the securities, company does not allow any single client to sell the securities through internet trading system unless the delivery of securities is made available in his/her CDC sub account (computerized custody account) with the company.
Any client desires trading limit/margins is required to make a formal request to the company. Trading limits/margins are not usually assigned to every account. After receiving a formal request from the client, the management decides to assign trading limit/margin to that client on the basis of established relationship, trading pattern and payment history. The management forwards the IT administrator to assign the limit/margin on the system and maintain the record.
Placement and Execution of Clients’ Orders
When the client account is opened, Abbasi Securities forwards the login Id, Password and PIN code at registered email of the client. To place and execute the order, client needs to access his/her online account by sign in at our website with the login Id and password provided to him/her. After signing in, client can place and execute his/her order through purchase and sell window available in the tool bar of the trading screen. When a client place online order through internet, it comes to our dedicated risk management system examine the order as per applicable limit/margin/risk management policy before forwarding it to the stock exchange’s trading engine.
Mode and timing of reporting trade confirmation to clients
Our online trading system confirms execution of the order at the same time it is executed. We are providing below a diagram of our process of order receiving and confirming wherein no time delays are occurred. The all backend processing is well connected through local area networking with the exchange server. An order received through internet is timely processed at our backend and sent to the KSE trading server with no time lag. Similarly, the confirmation of the execution of an order is also sent to the client end on timely basis. In addition, we also confirm all the executed trades in a report form to the clients through emails at the end of the day.
Margin Requirement and Margin Calls
Abbasi Securities generally does not allow trading on margins to the internet based (online) clients. Mostly online clients are allowed to trade against cash/credit in account. If any limit/margin assigned to any of the client is managed under a dedicated risk management system. If any shortfall arises in margins, the margin call is raised to the client accordingly.