One paisa per share, or 0.01 percent of the transaction value, is being considered as the minimum brokerage fee for fixed income ETFs by the Pakistan Stock Exchange (ETF). For every buy and sell that is not squared during the same trading day or only on one side that is squared off during that day, the bourse stated in a notice that the standard brokerage commission rate is “3 paisas per share,” or “0.15 percent of the transaction value,” according to Annexure-III of Chapter 4 of PSX Regulations. According to the notice, ETFs are likewise subject to the same brokerage commission rate. An ETF is an investment product that combines stock market returns with the diversification of a mutual fund. The PSX became the first stock exchange in the world to sell ETFs back in March. Moreover, fixed income ETFs have inherent characteristics that distinguish them from equity class ETFs, such as equity class ETFs have a much greater upside potential because stocks may hit the upper cap of the circuit breaker in a trading day, but T-Bills/ PIBs are less volatile, especially when interest rates have fallen. According to the report, investors must hold their fixed income ETF units for at least two weeks (assuming an annual return of 8 percent) in order to break even with the present impact of brokerage commissions of 0.3 percent (on both buy and sell sides combined). Fixed-income ETFs have either been exempt from trading costs in other jurisdictions or have been subject to lower trading fees than stock class ETFs, according to the report. So PSX is considering a distinct minimum brokerage commission structure for these classes of ETFs. To that end, PSX is proposing to lower the brokerage cost for fixed-income ETFs to “1/1 paisa per share” or “0.01 percent of the transaction amount, whichever is higher,” it stated. Proposed regulatory changes have also been solicited by the PSX.