Forex trading is one of the upcoming and very lucrative businesses that Pakistanis are taking. Compared to larger economies like Australia, Japan and the UK, Pakistan is just a small player in the world of Forex trading. Contrary to what some people say, it is legal to trade in Forex in Pakistan. The State Bank of Pakistan which is the central bank of the country is mandated with the role of overseeing all financial and monetary activities in the country. It then follows that the top Pakistani FX brokers have to be licensed and be regulated by the bank.
Under SBP, there is the Foreign Exchange Regulations Act of 1947 which defines all rules and laws regarding foreign exchange in the country. As a trader, you should, therefore, search for that broker that is fully regulated by the bank. Visit the Exchange Policy Department of SBP to establish whether your broker is regulated.
Choosing a broker that is credible can be tough at times. However, when you ask them for the basics such as whether they are registered or if they have an office in Pakistan, picking one suddenly becomes easy. The other question to ask is whether the broker allows traders to deposit and withdraw in the local currency. An SBP regulated Forex broker should afford clients deposit and withdrawal options in Pakistani Rupees.
FX trading is a very fast kind of business hence the need for a broker to afford the best timely support to the clients. Brokers around the world often offer 24/5 support. If the broker is out of your time zone and by many hours, then you will have a problem when you want to reach their support team. Look for a firm which is professional and which can easily and conveniently be reached.
There are few FX brokers which are incorporated in Pakistan. However, the government has allowed other international players to enter the market and this has substantially brought up the number of legitimate Forex brokers in the country. We have compiled a Pakistani Forex brokers list after conducting in-depth research on them. You can then opt to choose from the list the best place to do your trading.
One way to learn about a broker is to visit their website. The other is to read their review on our website. You will learn all about Pakistani Forex scams and much more when you opt to browse our website where your safety is guaranteed. On our website, you won’t find sign-up links which might sometimes lead to rogue brokers’ websites.
The State Bank of Pakistan was established in 1956. Its role is to ensure that the monetary policy of the country is in place so that the Rupee remains stable. The bank also promotes the economic growth of the country. This means that the bank has a lot on its plate. It has, therefore, created the Exchange Policy Department which oversees all foreign exchange related issues. The department actively coordinates with law enforcement agencies to contain illegal Forex brokers in the country.
The Exchange Policy Department (EPD) is mandated with the role of making sure that the foreign exchange market is stable. In addition, the department formulates and implements the country’s currency exchange regime in line with the government’s and SBP’s policies and objectives. The department does advise the government and other SBP departments on matters relating to trade policy, free trade agreements and WTO among others.
Because of EPD’s strictness with regard to Forex regulations, every trader is afforded a chance to find a top Pakistani FX broker of their choice. The Foreign Exchange Act of 1947 is embraced by the country and is admired by other countries. Bangladesh is one country which has even gone ahead and adopted the Pakistani FEC Act.
For a broker to be considered wholly regulated by SBP, it should adhere to all the regulations laid out by the Exchange Policy Department. It does not matter whether such a broker was incorporated outside or within Pakistan. It should adhere to the rules of ensuring that the FEC Act is observed not only by themselves but also by their clients.
Some of the largest Forex brokers in Pakistan happen to also conduct business in other countries. This is because they are licensed and regulated by some of the best renowned global regulatory bodies. You will find that many of the brokers are regulated by CySEC which is based in Cyprus. Others are regulated by the U.K based regulatory body FCA. The other regulatory agencies include IFSC, FSB, MiFID, ASIC, and MAS. Many of the brokers are licensed and regulated by more than one regulatory body.
For a firm to be licensed to trade in Pakistan, it must have a minimum paid-up capital of Rs. 20 million. 10% of the paid-up capital must be maintained as a reserve with the state bank. A firm shall not conduct any other business other than that which it was licensed to be doing.
The broker must employ qualified staff to the satisfaction of SBP. A license will be valid for only three years. A broker must apply for the renewal of the license at least three months before the expiry of their existing license. The department reserves the right to revoke a trading license of a broker should the broker breach some of the laws highlighted by the bank.
FX brokers in Pakistan are not constrained a lot when it comes to leverage. They can go up to 3000:1. Many of the brokers don’t go below 200:1. However, as is also in the rest of the world, a broker is required to disclose their nature of the business and the risks involved in the Forex trading to their clients.
Pakistan Stock Exchange was founded in 1949. It is a public company by guarantee. It employs state-of-the-art technology on its platform. This helps it deliver timely information and automated trading operations every day of the week. Top FX Pakistani brokers should give you access to several types of markets. You can trade in currencies or you can opt to trade in CFDs (contracts for difference) and other derivatives. Pakistan Forex is strictly regulated by the SBP. However, CFD trading for many traders is in a grey area. Forex trading is getting popular by the day and CFD is certainly catching up. However, cryptocurrency seems to be pretty popular too and it might even level with Forex in the near future. Pakistani cryptocurrency brokers are also offering Forex as well as CFD trading. It is, therefore, pretty easy to pick what you want to trade on one platform.
Credible Pakistan regulated Forex brokers are able to offer traders CFD trading. Even though PSX has 200 members, which is not a large pool like those of FTSE or Dow Jones, it still offers a good platform from where brokers can pick CFDs. You should beware though that not all brokers can offer you CFD trading. When registering with a broker, you should specifically ask them whether they do actually offer this service. PSX indicates on its website that it is planning to offer fixed offer derivatives and exchange-traded bonds in the not far off future.
Pakistan Forex scams are not new. In 2008, the government charged Khanani and Kalia International CEO for illegally transferring funds from Pakistan to Afghanistan. In 2011, the government forced the firm to close all its offices in the country. However, in an unprecedented turn of events, the court acquitted the Khanani and Kalia CEO and four other bankers charged alongside him of all charges levelled against them. The judge said there wasn’t enough evidence to continue with the case. Even though the SBP warns that anyone, whether broker or trader caught engaging in illegal Forex activities, will be severally punished, this does not prevent Pakistan from becoming one of the favourite havens for scammers.
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