The Chief Executives of all

Exchange Companies

Dear Sirs / Madam,

Duration of the Renewed License

Attention of the Authorized Exchange Companies (ECs) is invited to the Rules No. 37 & 40 circulated vide F.E. Circular No. 09 dated July 30, 2002 regarding renewal of licenses.

It has been decided to amend the instructions relating to renewal of licenses of ECs circulated vide above referred circular. As per the revised instructions, the licenses of the ECs will be renewed as per the following criteria:-

1. Licenses of ECs who have been assessed as ‘Fully Compliant’ and ‘Satisfactorily Compliant’ in SBP’s inspection reports will be renewed for a period of three years.
2. Licenses of ECs assessed as ‘Fairly Compliant’ will be renewed for a period of two years.
3. Licenses of ECs assessed as ‘Marginally Compliant’ will be renewed for a period of one year only, during which the company will be required to improve upon its performance, corporate governance and compliance status.
4. Licenses of ECs assessed as ‘Non Compliant’ may be considered for renewal for six months only along with a warning advising them to address the concerns mentioned in the SBP’s inspection report. In case the EC fails to address the observations contained in the inspection report, its license will automatically stand expired without any possibility of renewal.

The request for renewal of the license must reach State Bank of Pakistan at least 60 days before expiry of the said license.

All other instructions in the matter will remain unchanged.