The Chief Executives,
All Banks / DFIs

Dear Sirs / Madam,

REGULATIONS FOR FINANCING TO BROKERS BY BANKS / DFIs

In order to facilitate the transition from Badla to Margin Financing in Stock Exchanges of Pakistan, encourage active participation of banks / DFIs in this area, unlock investments in equities, enable investors to leverage their stock holdings and to ensure that the relevant activities are undertaken by banks / DFIs in a prudent manner, State Bank of Pakistan is issuing the enclosed regulations for financing to brokers by banks / DFIs. While the banks / DFIs will continue to provide financing against shares to their retail investors under Regulation R-6 of Prudential Regulations for Corporate / Commercial Banking, the enclosed regulations will apply for extending financing facilities (including margin financing) to brokers.

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