The efficiency of financial markets depends on the professional standards and integrity of the participants. Keeping in view the growing size, diversity and complexity of the Interbank Market, the need for high ethical conduct and uniform practices has increased.

In order to foster high standard of business conduct, adopt good market practices and ensure equitable and healthy relationships among market participants, State Bank of Pakistan has prepared a ‘Code of Conduct’ for treasuries of Banks, DFIs and PDs. The recommendations contained in the recognized codes like “ACI Model Code of Conduct” and “ Singapore Guide to Conduct & Market Practices for Treasury Activities” were considered in compiling this ‘Code of Conduct’. Market stakeholders have also been consulted through Financial Markets Association of Pakistan (FMAP).

All Banks, DFIs and PDs are advised to implement this ‘Code of Conduct’ in their treasuries and ensure its meticulous compliance. The inspection teams of SBP will check its compliance during on-site inspections. Violation of any provision of this ‘Code of Conduct’ may be subject to appropriate regulatory action.

Risk and Compliance Department of each Bank/DFI/PD, will submit a quarterly report to their ALCO confirming compliance to this ‘Code of Conduct’, which should be discussed and documented along with all exceptions and breaches.

All Banks, DFIs and PDs will submit undertaking of reading & understanding t he provisions of this ‘Code of Conduct’ from their staff as per Annexure A. The staff will include Dealers, Desk Heads and Assistant/Deputy Treasurers and officials involved in conducting, authorizing and settlement of transactions of all product classes. The duly signed undertaking should be submitted to the undersigned before close of business on January 31, 2014.

Enclosed:

i- Annexure A
ii- The Code of Conduct