SBP issues instructions to banks on FX/SWAP trade confirmation

KARACHI: State Bank of Pakistan (SBP) on Friday issued instructions to banks regarding foreign exchange (FX)/SWAP trade confirmation.

The SBP said that it had earlier issued instructions through a circular on October 09, 2012 under which the banks provide FX/SWAP trade confirmations duly signed by their authorized signatories, as per standardized hard copy format (hard copy) on the transaction date.

They are also required to provide SWIFT MT-300 confirmation message (SWIFT message) in addition to said hard copies.

It has, however, been observed that some of the banks occasionally fail to send said hard copies/ SWIFT messages on the transaction date.

Such lapses pose serious difficulties in timely verification of trade terms and other trade related details thereby unnecessarily exposing the banks to critical settlement risk.

The banks are also required to keep this department updated on any changes in their list of authorized signatories along with contact details, however, intermittent non-compliance to these instructions has also been noted.

In order to ensure smooth settlement process, the banks are advised to:

Ensure that all SWIFT messages, of a given transaction date, are invariably transmitted to this department with zero tolerance for any leftover SWIFT message.

This means that transmission date of a SWIFT message should not be later than the trade commitment date (transaction date) of related FX/SWAP trade.

Further, in order to bring efficiency in the process, transmission of hard copy may be discontinued from now onwards.

However, submission of hard copy would be mandatory in situations where a bank is unable to transmit SWIFT message due to any reason of whatsoever in nature.
Submit an updated list of authorized signatories with specimen signatures and contact details, on quarterly basis (format attached).

Such updated list for quarter ending Jul-Sep19 may be submitted by November 28, 2019. The future reports may be submitted within 10 working days from end of a calendar quarter.

In case of any future changes of authorized person(s) during a quarter, this department will be immediately notified of such changes but not later than 3 working days.

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