Behind the scenes when you're buying or selling a stock on the Pakistan Stock Exchange (PSX).
Here's how it works for you:
You Make a Trade (Trade Date - "T"):
You buy or sell shares through the StockIntel trading interface.
Once you press buy or sell, it is mandatory for your order to match someone else's corresponding order. To illustrate, imagine if you add a buy order for 10 EFERT at PKR 150, then for your trade to "execute" on PSX, another person(s) has to have a sell order at the same price and quantity. Without this, your order will not be executed.
Your brokerage account might immediately show the shares you bought or the cash from your sale, but these aren't finalized yet. They're just "pending."
2. The "Behind-the-Scenes" Work (T to T+1):
Think of the NCCPL (National Clearing Company) as the trusted middleman for all trades in Pakistan. They step in to make sure everyone keeps their promise.
The CDC (Central Depository Company) is like a digital vault where all Pakistani shares are held electronically. They track who owns what.
NCCPL figures out who owes shares and who is owed shares, and who owes money and who is owed money, for all trades done that day. They "net" everything out to simplify the transfers.
3. The "Final Handshake" (Settlement Date - T+2):
For most regular stock trades in Pakistan, this happens two business days after your trade. So, if you trade on Monday (T), it settles on Wednesday (T+2).
NCCPL tells CDC to officially move the shares out of the seller's digital account and into the buyer's digital account.
NCCPL tells the banks to move the money out of the buyer's broker's bank account and into the seller's broker's bank account.
What this means for you:
If you bought: On T+2, you officially own those shares. They are fully yours, and you'd be eligible for any dividends announced after this date.
If you sold: On T+2, the money from your sale is officially settled and available for you to withdraw or use for new investments.
In simple terms:
Trade Date (T): You click buy/sell.
Settlement Date (T+2): Two business days later, the shares and money are actually swapped and become final. This is when you truly own the shares or have the cash available.