Stock Exchange provides a market place where securities are exchanged and/or bought and

sold for consideration. It provides primary as well as secondary market. The primary market
facilitates initial public offerings of securities to investors by new companies for the purpose
of raising required funds, whereas the secondary market facilitates trading in already issued
securities amongst the buyers and sellers at fair and market determined prices.

In Pakistan presently there are three Stock Exchanges at Karachi, Lahore and Islamabad. Of
these, Karachi Stock Exchange (KSE) is the oldest, biggest and most active and liquid market
which was also declared as the "Best Performing Stock Market of The World For the year
2002".

In 1991, the secondary market was opened for foreign investors on an equal basis with the
local investors. This measure along with the government policy of privatisation has resulted in
rapid growth of the market. Privatisation has been adopted as a philosophy and most of the
business & finance activities which were previously reserved for the public sector have now
been opened for the private sector.

The change of policy is most visible in the financial sector where a number of commercial
banks, investment banks, discount houses, leasing companies, modarabas, life insurance
companies and mutual funds have been allowed in the private sector. Liberalisation policy has
led to rapid deregulation of the national economy and the impediments to private initiative
have been speedily removed. Foreign exchange holdings and transfers have been liberalised,
industrial sanctioning has been done away with except for few sectors where, for strategic
reasons, prior permission of the government is necessary.
. Karachi Stock Exchange

UK's Foreign Secretary William Hague rings the closing bell at the Karachi stock exchange

Founded on 18 September 1947, Karachi Stock Exchange Limited (KSE) was registered in Pakistan.

The Karachi Stock Exchange Limited (KSE), was a stock exchange located at the Stock Exchange
Building (SEB) on Stock Exchange Road, in the heart of Karachi's Business District, I. I. Chundrigar
Road, Karachi, Sindh Province of Pakistan.[19] It was Pakistan's largest, and one of the oldest stock
exchanges in South Asia. Karachi Stock Exchange was also listed among 10 best stock markets in
the world in 2015.[20][21] According to Bloomberg, the Pakistani benchmark stock market index is the
third-best performer in the world since 2009.[22] In June 2015, Khaleej Times reported that since
2009, the Pakistani equities delivered 26 percent a year for US dollar investors, making Karachi the
best-performing stock exchange in the world. As of 10 July 2015, total market capitalization reached
Rs. 7.33 trillion (US$72 billion approximately).[23][24]

Lahore Stock Exchange

Lahore Stock Exchange is located in Lahore, Pakistan. It was amalgamated into the national
Pakistan Stock Exchange on 11 January 2016. The Lahore Stock Exchange (Guarantee) Limited
came into existence in October 1970, under the Securities and Exchange Ordinance of 1969 by
the Government of Pakistan in response to the needs of the provincial metropolis of the province
of Punjab. It initially had 83 members and was housed in a rented building in the crowded Bank
Square area of Lahore.

Islamabad Stock Exchange

Islamabad Stock Exchange Tower is now the office of PSX

Islamabad Stock Exchange or ISE was the youngest of the three stock exchanges of Pakistan and is
located in the capital of Pakistan. Islamabad stock exchange (ISE) was incorporated as a guarantee-
limited company on 25 October 1989 in Islamabad. ISE tower is a 22-storey building, which makes it
the second highest building of Islamabad after the Telecom Tower. Area covered by the building is
562,629 sq ft (52,269.9 m2), it consists of three levels of basements and ground plus 18 floors above.

Brief History:
Pakistan Stock Exchange Limited (PSX) (formerly: Karachi Stock Exchange (Guarantee) Limited (KSE) was
established on September 18, 1947. It was incorporated on March 10, 1949. Only five companies were initially listed
with a total paid-up capital of 37 million rupees. The first index introduced in KSE was based on fifty companies and
was called KSE 50 index. Trading used to be carried out on open out-cry system. Computerized trading system
called Karachi Automated Trading System (KATS) was introduced in 2002 with a capacity of 1.0 million trades per
day and the ability to provide connectivity to an unlimited number of users.

In October 1970, under the Securities and Exchange Ordinance of 1969 by the Government of Pakistan, a second
stock exchange was established in Lahore in response to the needs of the provincial metropolis of the province of
Punjab. It initially had 83 members and was housed in a rented building in the crowded Bank Square area of Lahore.
The LSE was the first stock exchange in Pakistan to use the internet.

Yet another stock exchange known as Islamabad Stock Exchange was established in Islamabad, the capital city of
Pakistan on October 25, 1989 with the main object of setting up of a trading and settlement infrastructure, information
system, skilled resources, accessibility and a fair and orderly market place that ranks with the best in the world and to
cater to the needs of less developed areas of the northern part of Pakistan. It was licensed as a stock exchange on
January 7, 1992.

All these three exchanges had separate management, trading interfaces, indexes, listing criteria etc and thus had no
mutual links to each other. All three exchanges were previously operating as a non-profit organizations with
mutualized structure wherein there respective members had trading as well as ownership rights. This structure
inherently created conflict of interest and perceived to jeopardize the investors' interest. Therefore, the Stock
Exchanges (Corporatization, Demutualization & Integration) Act, 2012 (known as "Demutualization Act") was
promulgated by the Government. As a result these three exchanges were merged together to form a new combined
exchange called Pakistan Stock Exchange Limited (PSX) which started its operations on January 11, 2016 under this
new title.

As provided under the aforesaid Demutualization Act, now Members have ceased to be Members of PSX and they
have been issued Trading Right Entitlement Certificates ("TRECs") and PSX's ownership shares, thus separating
trading rights from ownership rights. Whereas TRECs represent trading rights, PSX shares represent ownership.
Now, TREC holders need not be a shareholder of PSX nor a PSX shareholder is required to be TREC holder of PSX.

As envisaged under the provisions of the Demutualization Act, regulatory functions have been segregated from
commercial functions of PSX, so that regulatory functions are not compromised for achievement of commercial
objective of generating revenue. Moreover, under the provisions of the said Act, after demutualization, persons
representing TREC holders on the PSX Board shall not be in majority and the Act also envisages divestment of
shares of TREC holders held in their blocked accounts to strategic investors and general public/financial institutions
within a certain time limit.

Karachi branch of Pakistan Stock Exchange is located on Stock Exchange Road, in the heart of business district of
Karachi. The premises is known as Stock Exchange Building.