IFMP Fundamentals of Capital Markets Certification (FCM), Pakistan cheat sheet
IFMP Fundamentals of Capital Markets Certification (FCM), Pakistan · Keep the key ideas within reach.
Capital Markets Fundamentals
A capital market channels medium- to long-term funds from savers to issuers; the money market handles instruments maturing within one year.
Primary market: issuer receives proceeds via IPO, further public offer, rights issue, or private placement. Secondary market: investors trade existing securities; proceeds go to the seller, not the issuer.
Pakistan's principal regulator is the Securities and Exchange Commission of Pakistan (SECP); Pakistan Stock Exchange (PSX) operates the equity trading platform under SECP oversight.
PSX headline index is KSE-100; sector indices include KSE-30 and all-share indices. The exchange also lists debt securities, ETFs, and REITs.
NCCPL (National Clearing Company of Pakistan) clears and settles trades; CDC (Central Depository Company) holds securities in book-entry form. T+2 is the standard equity settlement cycle.
Order types: market order executes at best available price; limit order executes only at the stated price or better; stop orders trigger once a threshold price trades.
Bid-ask spread = best ask minus best bid; it is a transaction cost and a proxy for liquidity. A narrower spread generally signals a deeper market.
Market participants: issuers, investors (retail and institutional), brokers/TREC holders, market makers, custodians, and the regulator.
A TREC (Trading Right Entitlement Certificate) is the licence that lets a broker execute trades on PSX; it is issued and regulated by SECP.