PSX Minor Investor Guidelines
PSX Minor Investor Guidelines: Pakistan Stock Exchange (PSX), in partnership with the National Clearing Company of Pakistan Limited (NCCPL) and the Central Depository Company (CDC), has introduced new guidelines for opening trading accounts for individuals below 18 years of age these rules, developed in consultation with the Securities and Exchange Commission of Pakistan (SECP), aim to regulate and streamline the process of investment accounts for minors.
All securities brokers have been directed to strictly comply with these new requirements to ensure transparency and investor protection the framework provides detailed procedures on how guardians can open, manage, and transition trading accounts for minors in a secure and compliant manner.
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| Category | Key Details |
|---|---|
| Account Eligibility | For individuals under 18; opened through a legal guardian with NADRA documents. |
| Account Title | “Name of Minor (Minor) through Name of Guardian (Guardian)” registered with NCCPL & CDC. |
| Trading Restrictions | No futures, leveraged, or same-day trading allowed for minor accounts. |
| Transactions | Allowed via minor’s, joint, or guardian’s bank account with verified mode of payment. |
| When Minor Turns 18 | Account suspended for new trades; new standard account must be opened in their name. |
Process for Opening and Managing a Minor Investor Account
Under the new PSX framework, a Minor Investor Account can be opened by a guardian who submits the minor’s valid NADRA documents, such as a Juvenile Card, Form-B, or Child Registration Certificate. In case the guardian is not the father, a court-issued Guardianship Certificate must be provided before account approval.
The trading account will be titled as “Name of Minor (Minor) through Name of Guardian (Guardian)” and must be registered with NCCPL and CDC as a minor account. The guardian will hold full control of the account, while brokers are directed to act only on the guardian’s instructions to prevent misuse.
- Guardian submits NADRA documents of the minor (Juvenile Card, Form-B, or CRC).
- Non-father guardians must present a valid court Guardianship Certificate.
- Account titled and registered as a minor account under PSX, NCCPL, and CDC.
- Guardian holds complete operational control; brokers follow guardian instructions only.
Transaction Methods and Trading Restrictions
PSX and NCCPL have defined strict rules for how money and trades will be managed under minor accounts. Payments and receipts can be made through the minor’s own account (opened via guardian), a joint account between guardian and minor, or the guardian’s personal account. All transactions must follow the registered payment mode to maintain transparency.
To protect young investors from risky activities, certain trades are completely prohibited in minor accounts. These include futures trading, leveraged products (MTS, MFS, SLB), negotiated deals, and same-day square-ups. The aim is to encourage secure and long-term investment practices.
Key Points:
- Transactions allowed through minor, joint, or guardian’s account.
- Brokers must maintain a clear record of all receipts and payments.
- Trading in leveraged or speculative products is strictly banned.
- Only low-risk, transparent trading options are permitted for minors.
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Procedures When Minor Reaches Legal Age and Tax Impact
PSX and NCCPL will monitor the age of all minor investors through CNIC-linked data. Guardians will receive a reminder one month before the minor turns 18. When the minor reaches legal age, the account will be suspended for new trades until a regular trading account is opened in the individual’s own name.
For tax purposes, all securities will be transferred from the minor’s account to the new account without affecting the original cost or acquisition date. The First-in-First-Out (FIFO) principle will be applied to avoid triggering capital gains tax. This ensures a smooth transition while maintaining compliance and accurate tax reporting.
- Brokers will track minors’ age and notify guardians before turning 18.
- Minor account suspended for new trades after age 18.
- A new standard account must be opened in the individual’s name.
- Securities transferred under FIFO principle to prevent capital gains tax.
Purpose and Market Impact of the New Guidelines
The new PSX guidelines aim to encourage financial literacy and responsible investment habits among young individuals. By allowing minors to have supervised trading accounts, PSX is promoting early financial education under proper legal and regulatory control.
This framework reflects PSX’s efforts to build a transparent and inclusive capital market with support from SECP, NCCPL, and CDC, the system ensures investor protection while expanding access to Pakistan’s stock market for future generations.
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