State Bank of Pakistan (SBP) has given general permission to authorized dealers (ADs) to send commission portions to international broker-dealers (IBDs) through local broker-dealers (LBDs) to facilitate foreign investment in the country.
For this reason, the banking regulator has amended Chapter 14 of the Foreign Exchange Manual. Payment of commissions to international broker-dealers š heading) Authorized dealers (ADs) may allow international broker-dealers (IBDs) to pay commissions against all settled trades which the IBD has made through a local broker-dealer (LBD). Launched for direct implementation via LBD.
State Bank of Pakistan sets terms and conditions for LBDs and IBDs (heading 2): LBD will be a securities broker according to the securities broker regulations of the Securities and Exchange Commission of Pakistan (SECP).
IBD will be a foreign entity engaged in brokerage business that has agreed with LBD to co-operate with the brokerage commission arising out of the sale and purchase of securities in Pakistan by non-resident IBDs.
The LBD will apply to remittances which will be signed by the CFO and with the agreement that the requested amount has not been remitted from Pakistan before and Form-M has been filled.
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