The PSE (www.p-s-e.com) is an over-the-counter (OTC) secondary capital market. It was established and incorporated as a private shareholding company in early 1995. On February 18 th 1997 , the PSE conducted its first trading session. Twenty eight shareholding companies have been approved for listing so far with a total market capitalization of over $650 million. The PNA is not active in PSE trading and debt instruments have not been introduced to the PSE yet. There are on-going discussions about securitizing existing mortgage loans and offering the securities which are going to be backed by these loans to the public through the PSE.

In order to attract foreign investment in Palestine , the PSE signed on May 1999 an agreement with the British Bank of the Middle East (a principal member of the HSBC Group). According to the agreement, the HSBC will provide custody and clearing services to foreign institutional investors. The PSE does not impose any restrictions on the foreign investment.

The PLC is in the process of passing a “Securities Law” which is essential for the future development of the PSE.