The Pakistan Stock Exchange (PSX), in collaboration with the National Clearing Company of Pakistan Limited (NCCPL) and the Central Depository Company (CDC), has introduced a comprehensive framework for opening trading accounts for individuals below 18 years of age. 

 

The guidelines have been finalised in consultation with the Securities and Exchange Commission of Pakistan (SECP).

 

According to the new rules, a guardian will be responsible for opening and operating a minor’s trading account, and all securities brokers have been directed to strictly follow the prescribed procedures. The framework outlines how such accounts will be created, managed and monitored within Pakistan’s capital market.

 

The account, titled in the name of the minor through the guardian, can be opened after the guardian submits valid NADRA documents such as a Juvenile Card, Form-B or Child Registration Certificate. 

 

If the guardian is someone other than the father, a court-issued Guardianship Certificate will be required. Brokers will be required to verify identity documents, conduct all AML and risk assessments through the guardian and mark the account as a minor’s account in their systems.

 

The guidelines state that the guardian will have full authority to operate the trading account. Payments and receipts may be routed through the minor’s bank account, a joint account or the guardian’s own bank account, based on what has been agreed between the two parties.

 

The new framework places strict limits on what minors can trade. Futures contracts, leveraged products such as MTS, MFS and SLB, negotiated deals and same-day square-ups will not be permitted.

 

PSX and NCCPL will also monitor the ages of all minor account holders through NADRA records. Guardians will receive a notification one month before the minor turns 18. Once the minor reaches adulthood, the trading account will be suspended for new transactions until a fresh account is opened in the individual’s own name. During the transition, securities will be shifted to the new account without changing their original cost or acquisition dates to avoid triggering capital gains tax.