PSX encourages transparency in brokerage commissions

March 01, 2024 (MLN): In the interest of ensuring fairness and transparency, the Pakistan Stock Exchange Limited (PSX) has urged all securities brokers to disclose to their customers an aggregate rate of brokerage commission to be charged to them on their executed trades, which must be within the stipulated brokerage commission range.

The local bourse has issued a notice to emphasize the significance of ensuring compliance with PSX Regulation 4.28, which requires securities brokers to collect brokerage commission from customers upon execution of their trades as per the standard range/ scale of brokerage commission prescribed.

The securities brokers may decide to collect the disclosed brokerage commission in whole at once or in parts thereof but the same should not exceed the maximum stipulated limit of 2.5% of the transaction value in any manner whatsoever.

In case the brokerage commission rate is decided to be collected periodically in parts, then the same as well as the aggregate rate of brokerage commission must clearly be disclosed to the customers in the tariff schedule.

PSX regularly conducts inspections and thematic reviews of securities brokers to monitor their consistent adherence with the regulatory requirements in all critical areas of investor protection which include brokerage commission.

Any deviation from the requirements is dealt with following the relevant penal clauses of PSX Regulations which include imposition of fines and relevant restrictions and conditions.

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