Criticism of illegal forex trading platforms

KARACHI: 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. nice 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 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.o compound matters, US regulators were running their own crackdown on Chinese tech firms throughout this turbulent period at home. Essentially, lawmakers in Washington were unhappy that many foreign companies were failing to comply with established legislation requiring all US-listed companies to submit to audits verifiable by the Public Company Accounting Oversight Board. Under the Holding Foreign Companies Accountable Act (passed in the US Senate in May 2020 and signed into law on 18 December of that same year).
Chinese companies who refuse to allow accredited auditors access to the company accounts would be delisted from US exchanges after three years of non-compliance. This naturally fueled fears among foreign investors that their American Depositary Receipts would become worthless given the CCP’s extreme reluctance to allow companies to comply with the new law. Another huge sell-off then ensued as US funds and retail investors dumped Chinese stocks en masse.So, is this the end of the downtrend, or is there more pain to come?As we have seen over the past eighteen months, this whole episode has been full of twists and turns. Periods of cautious optimism have been followed by even deeper depths of despair. Just when we thought one negative factor had been priced in, yet another reared its ugly head. That said, the previous “recoveries” were nowhere near as spectacular as what we saw on Wednesday and Thursday (16-17 March), and there was always a persisting sense of uncertainty surrounding key issues such as foreign listings, domestic regulation and financial penalties. Now, on the other hand, we have clarity on the legislative front both in China and the US (the HFCA and Chinese.
antitrust/antimonopoly laws are now final and all of the major tech companies that had fallen foul of legislation have already been fined by the authorities. This most recent statement by Liu He puts to rest the last question of whether China will allow its companies to list abroad and thus represents a key turning point in this saga. So, while it’s impossible to say whether this is the definitive turning point, it is safe to say that the headwinds have definitely quietened down, and the path to growth is clear. Enter the Dragon with offers trading on CFDs and investing on Real Shares in big names like Alibaba, Baidu and Ten cent as well as the China Large Cap ETF. Given the inherent volatility and near-term uncertainty of Chinese equities, leveraged trading may be risky. But the huge long-term potential and massive CAGR of this sector make it a good candidate for Liber text Invest clients.
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