Security:

A security is a financial instrument, typically any financial asset that can be traded.
The nature of what can and cannot be called a security generally depends on the jurisdiction in
which the assets are being traded.

Security issued and traded in Pakistan:

Public debt markets are markets for raising funds for the government from local and foreign
investors through debt instruments. In Pakistan, these include Market Treasury Bills (MTBs),
Pakistan Investment Bonds (PIBs), Government of Pakistan Ijara Sukuk (GIS), National savings
instruments, Eurobonds, International Sukuk, etc.

An efficient market of government securities allows better price discovery, enhances investors’
interest and reduces cost oforrowing for the government.

Marketable Government Securities

 Market Treasury Bills: MTBs, also commonly known as ‘T-bills’, are short-term, highly liquid
government securities issued in 3, 6 and 12 months tenors. The auctions of MTBs are
conducted fortnightly 8(on Wednesdays). The auction and settlement dates, target amount and
maturity amount are issued through pre-announced auction calendars.

Investor Portfolio Securities (IPS) Account:

The Investor Portfolio of Securities (IPS) account is necessary for investing in MTBs. Primary
Dealers/Scheduled Banks hold MTBs in IPS accounts on behalf of their customers. Customer is
the legal owner of the MTB held in the IPS account with banks in accordance with instructions of
SBP.

Benefits:

Guaranteed Repayment: The repayment of face value is guaranteed by the Government of

Pakistan.

Investment for short term: The MTBs are available in short-term maturity periods of 3, 6 and 12
months.

Higher Returns: These securities provide higher returns to the investor, as compared to most
bank deposits.

Accepted as Collateral: MTBs are acceptable by the banks as collateral.

Liquidity: Highly liquid and tradable in the secondary market.

Easy Process of Investment: Local and foreign investors can easily invest in the MTBs by
opening an IPS Account in any bank offering these services. In addition to IPS account, foreign
investors also have to open a Special Convertible Rupee Account (SCRA) with any Authorized
Dealer in Pakistan.

Pakistan Investment Bonds: PIBs are medium-to-long term government securities issued in 3,

5, 10 and 20 years tenors. The auctions of PIBs are conducted on the basis of pre-announced
auction calendars. The calendar provides the details of auction and settlement dates, target
amount and maturity amount.

Investor Portfolio Securities (IPS) Account: The Investor Portfolio of Securities (IPS) account is
necessary for investing in PIBs. Primary Dealers/Scheduled Banks hold PIBs in IPS accounts
on behalf of their customers. Customer is the legal owner of the PIB held in the IPS account
with banks in accordance with instructions of SBP.

Benefits :

Guaranteed Repayment: The repayment of face value at maturity and periodic coupon
payments are guaranteed by the Government of Pakistan.

Higher Returns: These securities provide higher returns to the investor, as compared to most
bank deposits.

Investment for medium term to long term: These securities offer investors with maturity periods
from 3 years to 20 years.

Accepted as Collateral: PIBs are acceptable by the banks as collateral.

Liquidity: Highly liquid and tradable in the secondary market.

Easy Process of Investment: Local and foreign investors can easily invest in the PIBs by
opening an IPS Account in any bank offering these services. In addition to IPS account, foreign
investors also have to open a Special Convertible Rupee Account (SCRA) with any Authorized
Dealer in Pakistan.

- GIS (FRR & VRR): GIS are Shariah compliant Islamic debt instruments currently issued in 3-
year tenors. GIS may be issued on the basis of Variable Rate Rentals or Fixed Rate Rentals.

Investor Portfolio Securities (IPS) Account: The Investor Portfolio Securities (IPS) Account is
necessary for investing in GOP Ijara Sukuk. Primary Dealers/Scheduled Bank hold GOP Ijara
Sukuk in IPS account on behalf of their customers. Customer is the legal owner of the Sukuk
held in the IPS account with bank in accordance with instruction of SBP.

Benefits:

Islamic mode of investment: GOP Ijara Sukuk are based on the guidelines of Shariah and
approved by SBP shariah Board.

Guarantee Repayment: The repayment of face value at maturity and periodic rental payment
are guaranteed by the Government of Pakistan.
High Profit: These securities provide Higher returns to the investor, as compared to most bank
deposits.

Accepted as Collateral: GOP Ijara Sukuk are acceptable by the banks are collateral.

Liquidity: Highly liquid and tradable in the secondary market.

Easy Process of Investment: Local and foreign investors can easily invest in the GOP Ijara
Sukuk by opening an IPS Account in any bank offering these services. In addition to IPS
account, foreign investors also have to open a Special Convertible Rupee Account (SCRA) with
any s in Pakistan.

Role of SBP in public debt management

- SBP serves as an agent of Government of Pakistan for managing domestic public debt. SBP is
responsible for conducting auctions of marketable government securities (MTBs, PIBs and GIS)
and managing certain public debt data. SBP also regulates Primary Dealers of government
securities.

- SBP aims to improve liquidity in the debt market of government securities by improving price
discovery and diversifying investor base, and to channelize savings of the end investors directly
to debt instruments by bringing more efficiency in banks’ intermediation process.

 Issuance of marketable government securities

- SBP conducts multiple-priced auctions of marketable government securities on behalf of GOP

on the basis of a pre-announced auction calendar. The auction calendar is decided by the GOP
and circulated by SBP to the market. MTB auctions are conducted on fortnightly basis, while
PIB auctions are conducted on need basis. The auctions are conducted on Wednesdays and
the settlement takes place at T+1 i.e. the following Thursday.  Primary Dealers (PDs) of
government securities are allowed to participate in the auctions of government securities.

- The auction calendar provides auction and settlement dates, maturing amount and auction
target amount. The calendar is issued every month for the next three months on rolling basis on
SBP website, Bloomberg and Reuters.

- The auction results cut-off yields/ accepted amounts are decided by the GOP and circulated to
the market by SBP on the same day on which the auction is conducted.

U.S. Stock Exchanges in the U.S.

Stock exchanges are marketplaces in which U.S. financial securities, commodities, derivatives

and other financial instruments are traded. While in the past, traders and brokers used to meet
physically in a stock exchange building to trade stocks, now most of the financial trading
happens electronically and automatically. Still, each exchange has its own unique listing
requirements for companies that wish to join. As a baseline, stock exchanges require regular
financial reports, audited earnings, and minimal capital requirements.
Companies that operate publicly through shareholders, or successful startups wishing to put up
an initial public offering (IPO) must go through a stock exchange. By being listed, companies
must quickly adjust their pace of operations: they become closely-watched and scrutinized
entities, as all their financials are open for potential investors to analyze. That being said,
companies also benefit from increased visibility, and "going public" by getting listed on a stock
exchange also increases a company's visibility, including attracting new clients, employees,
and other partners who view the company's listing as a sign of success.

Major Stock Exchanges in the U.S.

The two major U.S. financial securities markets are the New York Stock Exchange and
Nasdaq.

New York Stock Exchange (NYSE)

The NYSE is a stock exchange based in New York, founded in 1790. 1 In April 2007, the New
York Stock Exchange merged with a European stock exchange known as Euronext to form
what is currently NYSE Euronext.2 NYSE Euronext also owns NYSE Arca (formerly the Pacific
Exchange).3 In order to be listed on the New York Stock Exchange, a company must have
upwards of $4 million in shareholder's equity. 4 Locals and visitors can also see the exchange's
building on Wall Street in New York City--although more than 80% of trading is now done
electronically.

The American Stock Exchange (AMEX) was also a popular New York-based stock exchange,
which was acquired in 2008. Unlike the Nasdaq and NYSE, AMEX focused on exchange-
traded funds (ETFs).1

National Association of Securities Dealers Automated Quotation System (Nasdaq)

Unlike AMEX, the Nasdaq is the largest electronic screen-based market. Created by
the National Association of Securities Dealers  (NASD) in 1971, it is popular because of its
computerized system and relatively modern, as compared to the New York Stock Exchange. It
currently offers lower listing fees than NYSE and includes some of the largest companies, such
as technology giants Apple, Google, Amazon, and Microsoft. 5

Additional Exchanges in the United States

Some other smaller exchanges exist based on the city they are located in.

 Boston Stock Exchange (BSE) - made up of the Boston Equities Exchange (BEX) and

the Boston Options Exchange (BOX) and was acquired by Nasdaq in 2007
 Chicago Board Options Exchange (CBOE)
 Chicago Board of Trade (CBOT) - owned run by CME Group Inc.
 Chicago Mercantile Exchange (CME) - owned and controlled by CME Group Inc.
 Chicago Stock Exchange (CHX)
 International Securities Exchange (ISE) - includes ISE Options Exchange and the ISE
Stock Exchange
 Miami Stock Exchange (MS4X)
 National Stock Exchange (NSX)
 Philadelphia Stock Exchange (PHLX)