Taking notice of the increasing number of offshore foreign exchange trading platforms, the State Bank of Pakistan (SBP) has clarified that buying products/ services from such platforms is prohibited and against the laws of the land.
The SBP has also warned citizens that these platforms are regulated neither by the central bank nor the Securities and Exchange Commission of Pakistan.
The statement released from the SBP reads that “The products include (but are not limited to) foreign exchange trading, margin trading, contract for differences, etc,.”
It further added that “Any person in Pakistan buying products or services of such offshore platforms and remitting foreign exchange directly or indirectly to them through any payment channel is making himself/ herself liable to be proceeded against for violation of provisions of the Foreign Exchange Regulation Act 1947 (FERA). ”
The bank also directed the authorised dealers to inform their customers regarding the inherent risks and illegality of such trading with any such person/ entity.
“In case it is observed that an authorised dealer has failed to carry out the measures and has facilitated the transactions as outlined above, the SBP may proceed against that delinquent authorised dealer under relevant provisions of FERA and take any pecuniary or administrative action as deemed necessary,” the statement said.
Furthermore, they were advised to institute a mechanism of ongoing monitoring whereby such trading websites/ applications/ platforms are identified and blocked from making payments through any payment channel.
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