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.
In a statement on Wednesday, the central bank pointed out that these trading platforms – such as OctaFx, Easy Forex, etc – lure people through social media advertisements to buy/ invest in their products or services.
“The products include (but not limited to) foreign exchange trading, margin trading, contract for differences, etc,” the statement said.
“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),” it added.
Since such platforms are regulated neither by the SBP nor by the Securities and Exchange Commission of Pakistan (SECP), the public was advised to be careful and “refrain from buying/ investing in products and services of such offshore platforms to avoid any potential loss and legal proceedings under FERA”.
The central bank also advised the authorised dealers to ensure compliance with the relevant sections of FERA and take all necessary measures to stop payments to all such forex trading, CFD trading, margin trading websites/ applications/ platforms by their customers through any payment channel.
The bank directed the authorised dealers to inform their customers regarding the inherent risks and illegality of such trading with any such person/ entity.
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.
“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.
Published in The Express Tribune, May 19th, 2022.
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