SBP Terms Foreign Exchange Trading on Platforms like OctaFX as Illegal

Various foreign exchange trading platforms such as OctaFX, Easy Forex, etc. are luring customers to trade on their platforms. They are running heavy advertisements on major social media platforms including Facebook, Youtube, etc. Many citizens are investing and trading on these platforms. Some have made gains and some have lost their investments. Now it turned out that trading on these platforms is illegal.

According to a new SBP regulatory directive, sending money abroad to engage in foreign exchange trading, leverage trading, or contract for difference (CFD) trading using apps, websites, or platforms such as OctaFX is both dangerous and illegal.

SBP Terms Foreign Exchange Trading on Platforms like OctaFX as illegal

Additionally, they are selling their goods to Pakistani citizens and enticing them to buy their goods and services using social media marketing. Such purchasing by residents of Pakistan is a violation of section 4(1) of the FERA. Further, it has also been noted that Authorized Dealers (ADs) are facilitating payments through their payment gateways to such offshore trading platforms.

So in this regard, SBP mentioned two sections for authorized dealers:

Attention of Authorized Dealers (ADs) is drawn towards section 4(1) of the Foreign Exchange Regulation Act 1947 (FERA), which, inter alia, provides, “except with the previous general or special permission of the State Bank, no person other than an authorized dealer shall in Pakistan, and no person resident in Pakistan other than an authorized dealer shall outside Pakistan, buy or borrow from, or sell or lend to, or exchange with, any person not being an authorized dealer, any foreign exchange. Similarly, ADs attention is also invited towards section 5((1(a)) of the FERA which provides, “Save as may be provided in and in accordance with any general or special exemption from the provisions of this sub-section which may be granted conditionally or unconditionally by the State Bank, no person in, or resident in, Pakistan shall— (a) make any payment to or for the credit of any person resident outside Pakistan.