In line with the Pakistan Stock Exchange’s (PSX) commitment to make investing in the stock market a convenient process, the online account opening facility has been introduced for an account with security brokers.
With the process of digitisation of market functions, the online trading facility was on-boarded for investors almost two decades ago. It has been facilitated by the PSX through its KiTS (Karachi Internet Trading System) platform which is the basis of the online trading applications and software provided by brokerage houses to their clients.
The system enables investors to view their cash position, trade summaries, trade confirmations and custody position at the click of a button. The missing link was that the opening of an account was not online which was introduced in January 2021.
With the advancement in technology, the Covid-19 outbreak, and the Roshan Digital Account platform being launched which facilitated fulfilling know-your-customer (KYC) requirements online, online account opening was the next step on the path of innovation and progress.
The PSX is making efforts with the SECP to make the KYC requirement into a unified system whereby there will be a singular database that can be shared
Furthermore, the PSX, along with its cohorts in the capital markets, is making efforts with the Securities and Exchange Commission of Pakistan to make the KYC requirement into a unified system whereby banks and other market entities will have a singular database which they would be able to share and utilise for account opening of applicants.
This will make redundant the process of initiating KYC formalities every time an individual wants to open an account with any of the market entities.
Already, there are more than 50 brokerage houses that are offering an online account opening facility. Prospective investors can choose from a range of brokerage houses by going through the list on the PSX website.
The process of online account opening is a simple one. It involves filling out the online account opening form available on the brokers’ website, filling in the necessary details and submitting requisite documents online. The documents required for online account opening are:
Copy of valid and attested computerised national identity cards(CNIC)/national identity card for overseas Pakistanis (NICOP)/alien registration cards (ARC)/Pakistan origin card (POC)/passport of the main applicants.
Copy of valid and attested CNIC/NICOP/ARC/POC/passport of the joint applicants. Copy of valid and attested CNIC/NICOP/ARC/POC/passport of the nominee (optional — only for Single Accounts).
An attested copy of power of attorney (if the contact person is other than the main applicant), duly attested by a notary public Employee card/job card for salaried person.
Company’s letterhead for business individuals mentioning the name, CNIC, designation etc.
Salary slip for salaried persons.
Income statement for Business individuals or monthly income mentioned on the company’s letterhead.
Copy of utility bill/driving license/insurance policy/rent agreement (If the address is not as per CNIC).
Copy of zakat declaration of the applicant and the joint applicant (if applicable). In the case of a non-Muslim, an affidavit shall be submitted. Note: non-resident/ foreigners shall submit the documents duly attested by either notary public or consul general of Pakistan having jurisdiction over the applicant(s).
After the documents are submitted, the back-end process begins. The documents are verified by the National Clearing Company of Pakistan Limited (NCCPL) and a verification code is generated and communicated via SMS by NCCPL to the customer to complete and acknowledge the verification. The customer can then submit his payment cheque to the brokerage house in order to begin investing in securities listed on Pakistan Stock Exchange.
With about 50 per cent of the local populace living in rural and far-flung areas, the online account opening facility is a definitive method for enabling the peripherally located population to also take part in the investment scene on the stock market without having to travel all the way to a brokerage house physically. Similarly, for overseas Pakistanis, this is also a very valid option of account opening as this will allow them to access Pakistan’s capital market while they are living abroad.