The State Bank of Pakistan (SBP) has introduced a centralized foreign exchange (FX) trading platform called 'FX Matching' for the interbank FX market from 29 January 2024, vide a circular issued by the Central Bank to the Head/Principal. Notified. Offices of all Authorized Dealers (ADs) in Foreign Exchange.
To officially start interbank FX trading on the FX Matching Platform, the following instructions are being issued to ADs:
Key Features of FX Matching:
FX matching will be available to all ADs for interbank USD-PKR trading in ready value labeled as spot on the platform, allowing participants to trade in lot sizes of at least $500,000 and multiples thereof.
Trading on the platform will be on an anonymous basis which means participants will be able to place their own quotes or hit quotes placed by other participants without revealing their names.
The best bids and offers made on FX Matching will be visible to all participants. However, the best practicable quote for a particular participant will be subject to availability of counterparty limits.
Each participant can set a credit limit for its counterparties in FX matching. Participants are advised to maintain credit limits with major market participants to obtain the best quotes available on FX Matching.
Bid or offer prices placed on FX Matching will be firm and will remain valid until canceled by the Participant referring to the prices.
Participants are advised to log off from the platform and cancel all open orders (if not executed) before the market closes for interbank FX trading.
Interbank FX Trading on FX Matching and FXT Dealing:
It will be mandatory for ADs to implement FX Matching or FXT Dealing from January 29, 2024, to execute outright interbank FX transactions affecting FEEL (Foreign Exchange Exposure Limit).
FX swap transactions concluded with the same counterparty will continue in accordance with current practice including FXT dealing, telephone or other means.
On any given day, if the Federal Reserve Bank of New York is closed and the interbank FX market in Pakistan is open, trading on FX Matching will be at TOM value.
Participants should be careful in placing bids/offers and executing transactions on the platform and should monitor their orders to avoid executing wrong trades.
Reporting of Deals on FX Matching and FXT Dealing:
All trades executed by ADs on FX matching and FXT dealing will be reported electronically to SBP in real time through the system.
The notice advised that to ensure real-time reporting, all tickets should be verified by both counterparties immediately after trade in FX matching and FXT dealing.
The existing procedure of end-of-day reporting using the Foreign Exchange Computerized Reporting System (FXCRS) will continue as per the existing guidelines.
0 Comments