Who regulates the financial markets in Pakistan?
The Securities and Exchange Commission of Pakistan (SECP) is the regulator of the securities marketplace. SECP regulates public companies, government entities, mutual funds, and all investors in stocks or bonds. SECP also provides online access to documents regarding the actions of listed companies such as Shareholders’ Meetings, Annual General Meetings, etc. Exness, FBS, ICMarkets, InstaForex, Forex.com, OctaFX, FXTM, XM, CMC Markets, and FXCM are among The best broker in pakistan which are regulated by SECP.
Is Forex legal in Pakistan?
Forex trading is legal in Pakistan. Which the Securities and Exchange Commission of Pakistan has regulated. The State Bank of Pakistan also covers Forex trading. This was made possible by the Forex policy outlined in 2000 which came into effect in 2001.
What is Forex Trading in Pakistan?
Forex trading in Pakistan is trading one currency against another; USD/CAD, AUD/JPY, and so on. These currencies are traded with each other in pairs because their price action tends to move at the same time and when you can forecast or predict which direction they will move based on economic indicators or news releases, which is called fundamental analysis, you can make money.
Is Forex Trading Halal?
A frequently asked question by Muslims who are knowledgeable about Islam but not familiar with the world of finance is: Is foreign exchange trading halal?
As long as the broker is reliable and using currency exchange is not like gambling, from an Islamic point of view it is no problem. That being said, several considerations need to be made before deciding whether forex trading could be right for you financially and spiritually.
So, is Forex Trading Halal? What makes this question so difficult for some is that this kind of financial activity has been deemed forbidden (haram) according to many Muslim scholars because it involves two risks: interest (riba) and uncertainty (gharar). Interest was discussed earlier in this paper, so we won’t go into detail right here except to say that even though interest rates might differ between trades based on what broker or exchange you might be utilizing, most brokers don’t charge above spreads that variety from 1 -7 pips depending on where your currency pair is traded.
What to Look For In Pakistani Broker Accounts
Before you proceed to open an account to trade Pakistani stocks, you should consider the following factors. These factors include:
All brokers must offer an online trading platform for traders to place their orders on PMEX, PSX, or other similar exchanges. The platform ought to be effortless to navigate and use. Most platforms offer technical analysis tools such as indicators and price charts, along with news feeds. One of the best platforms is Tickmill MT4.
Membership and Exchange Regulation
Brokers dealing with PSX are required to hold a TREC (or Trading Right Entitlement Certificate) provided by PSX which allows the broker to trade on the stock exchange. All financial companies, including stockbrokers, need to be regulated by the PSEC.
Full-service online brokers offer access to market research as well as other useful information that investors and traders alike can use.
Commission Fees and Other Fees
Traders who plan to trade actively will most likely need a broker with lower fees and commissions per trade as these fees tend to eventually add up. Less active traders can also take advantage of reduced fees.
A broker with good customer support will try their best to answer questions about your user account and help resolve your issue. Traders can contact their preferred Pakistani stockbroker by phone calls and emails.
Types of Trade in Pakistan
When looking for a broker to trade CFDs or Forex with, be careful to be a reputed and regulated broker that receives high praise from its clients. Online brokers typically offer their clients several types of trading accounts (as quipped above), including:
Entering into derivative transactions known as CFDs (or contracts for difference) allows traders to make speculations about the future price movements of their underlying asset. Such assets usually involve commodities, stocks, currency pairs, stock indices, or other types of financial tools.
Forex Trading (Foreign Exchange)
Foreign exchange trading requires exchanging a single distinct currency for another. Exchange prices are susceptible to fluctuations because the value of a currency goes up or down with another provided currency pair. Forex trading is gaining more traction after online trading has become prevalent in recent years. The Forex market is recognized as the most prominent fiscal market internationally, with the most liquidity. In April 2016, the Forex market showed a daily turnover of 5.1 trillion, based on data compiled by BIS (or Bank for International Settlements).
Islamic or sharia-based accounts are best suited for traders and investors who wish to trade using an account that complies with Sharia law. These accounts remove the involvement of Riba (riba), which is considered Haram under Sharia law.
A demo account is an account that uses virtual money that is not real. These accounts are used by novice traders seeking to practice trading, try trading strategies, or evaluate potential brokerage platforms and services. Such accounts simulate a real trading environment, helping new traders build confidence in their strategy.