TABLE OF CONTENTS

Money Currency Money changer License issuance process Registration & licensing procedure Covering rules & regulation How currency exchange market works Facts about forex market Fundamental & technical analysis in forex Obtain bank details Registration form Exchange companies ready to replace money changers Conclusion References

01 01 05 06 09 11 15 16 17 19 22 25 25 26

MONEY:
A medium that can be exchanged for goods and services and is used as a measure of their values on the market, including among its forms a commodity such as gold, an officially issued coin or note, or a deposit in a checking account or other readily liquifiable account.

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The official currency, coins, and negotiable paper notes issued by a government. CURRENCY: 1) Money in any form when in actual use as a medium of exchange, especially circulating paper money. Switching from money to currency means, i believe, taking the gold out of the vaults and putting it into circulation as cash. i. Currency (Cash in hand) Notes and coins that are of fixed nominal values and accepted as legal tender in an economy that are issued by the central bank and/or government. This category should also include currency that is no longer legal tender, but that can be exchanged

immediately for current legal tender. Non-financial corporations do not have any liability in the shape of currency because those are not issuing authorities. Pakistani Bank Notes These are promissory notes (or bank notes) issued by the State Bank of Pakistan in various denominations, with the promise to pay the said denomination (face value) in Rupee when called for payment. These are issued with the guarantee of the

Government of Pakistan. Separate reporting of Pakistani bank notes is required to know the liability of the central bank. Pakistani Coins These are the currency coins issued by the Islamic Republic of Pakistan with various denominations of currency units (Rupee). These also include subsidiary coins (decimal coins) issued by the federal government in sub-denomination of a rupee (paisa 50 / 25). Separate reporting in this case is also required to know the liability of the central government. Foreign currency (Foreign currency notes and coins)

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All foreign currency notes and coins are liability of the foreign governments or nonresident issuing authorities/ central banks etc. These are claims of the economy upon non-residents that is why these are required to be reported separately. ii. Transferable deposits All demand deposits in national or in foreign currency i.e., exchangeable on demand at par without penalty or restriction, freely transferable by cheque or otherwise, commonly used to make payments, are known as transferable deposits. These deposits include current deposits, savings deposits and special savings accounts with a possibility of direct payments to third parties, savings accounts balances subject to automatic transfer to regular transferable deposits, and money-market fund that have unrestricted third-party transferability privileges. Transferable deposits that are held in banks in the process of liquidation should be classified as restricted deposits because they cannot immediately be withdrawn or used for direct third-party payments. Deposits denominated in national currency should be recorded at book value (outstanding amount plus accrued interest). This category would not be reported on the liability side of the non-financial corporations as those are not deposit accepting institutions but on the assets side as transferable deposits with SBP, deposit money institutions, or with non-residents. iii. Restricted/ compulsory deposits Deposits for which withdrawals are restricted on the basis of legal, regulatory, or commercial requirements are called restricted deposits. Deposits that are placed for maturity period from which withdrawals also can not be made before the maturity should not be included here but be classified as other deposits. Restricted deposits should be on both assets and liabilities side of the corporations. These include compulsory savings deposits like, import deposits, and similar types of deposits related to international and deposits trade, in security deposits, that margin are deposits, closed sundry deposits or

financial

corporations

pending

liquidation

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reorganization etc. Non-financial corporations are non-deposit accepting institutions. However, they may retain some restricted or compulsory deposits that include

compulsory savings deposits like employees provident fund accounts, staff pension funds, employees security deposit, staff guarantee fund, import deposits, and similar types of deposits related to international trade, security deposits, margin deposits and sundry deposits (Various type of deposits for which claimant is not available) etc. iv. Other deposits These represent all claims other than transferable deposits and restricted deposits in national currency or in foreign currency that are represented by evidence of deposits. These include:

Sight deposits (which permit immediate cash withdrawals but not direct third-party transfers);

Non-transferable savings deposits and term deposits; Shares or similar evidence of deposits that are legally or in practice, redeemable immediately or at relatively short notice with financial corporations;

Shares of money-market funds that have restrictions on third-party transferability; Call money deposits with financial corporations; Margin payments related to options or futures contracts, as are very short-term repurchase agreements

This category includes non-financial corporations deposits other than transferable and restricted deposits with deposit money institutions, other deposit accepting institutions or with nonresidents. National currency and foreign currency equivalent to Pak rupees should be reported separately.

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Money Changer Money changer (or coin changer or coin dispenser) is also a device that changes/dispenses coins. It can take various forms. One type is a portable coin dispenser, invented by Jacques often worn on a belt, used by conductors and other professions for manual fare collection. It dispenses a single coin when a lever is depressed. Another type is a fixed coin dispenser that dispenses several coins at once, such as four quarters or five nickels, for making change at a venue for coin-operated devices, such as a penny arcade, pinball parlor, or automat. It is typically mounted in a manned booth or counter. A third type, sometimes called a "change maker" or "automatic cashier", has an array of 100 or more buttons that dispense exact amounts of change from 1 to $1.00. These are typically found at teller windows in banks and sometimes in retail establishments. This type of change maker may also operate electromechanically under control of a cash register, automatically giving correct change for a customer's purchase. In the Pakistan State bank of Pakistan play an important role to authorize the currency exchanger to operate in Pakistan. For this State bank of Pakistan has its separate department for this. Rules and regulations are defined by state bank to the company which is interested to operate in Pakistan. The department name for this is Exchange policy department that monitor all matter of concern Money exchanger in Pakistan. In 1998 some companies was operating without getting license from State bank of Pakistan. State bank of Pakistan decide how to give license to the companies.

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LICENCE ISSUANCE PROCESS. ISSUANCE OF AUTHORIZED MONEY CHANGERS LICENCE Please refer to F.E. Circular No. 32 dated the 4th of July, 1998 on the above subject. In a meeting held between the representatives of the Authorized Money Changers and the State Bank, it was agreed that for obtaining licences the date will be extended upto the 30th September, 1998. It was also agreed to divide the Money Changers into two categories. The fee structure will be changed accordingly and a fresh circular will be issued for the purpose. Accordingly, the last date for filing renewal application of the licences is hereby extended from 31st July, 1998 to 30th September, 1998. The Money Changers doing their business without the license are also required to obtain the licences by 30th September, 1998. The Money Changer have been divided into the following two categories: Category A - Authorized Money Changers having more than one branch: Fee of issuance of fresh (a) license Fee for renewal of licence for main office Rs. 300,000.00

(b) for other branches Rs. 50,000.00 (a) for main office Rs. 50,000.00 p.a.

(b) for other branches Rs. 10,000.00 p.a. Category B - Authorized Money Changers having a single office: Fee for issuance of fresh license Rs. 50,000.00 Fee for renewal of license Rs. 10,000.00 p.a. In cases where Money Changer falling under category "B" opens additional branch, he will be required to pay the differential of Rs. 300,000.00 and Rs. 50,000.00 for the main branch at the time of obtaining the licenses for the additional branches in addition to fee of Rs. 50,000.00 per additional branch The application for issuance of fresh license will be made to the area office of the State Bank through an Authorized Dealer along with the following documents:-

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Evidence that the paid up capital of the applicant is not less than Rs. 1 million as per audited accounts of the company and in case of individual / partnership firm, the net worth is not less than Rs. 500,000.00 as per the wealth statement filed with the Income Tax Department. Evidence that the applicant(s) is/are Pakistani national(s) or resident Pakistani firms/companies that is paying income tax. Evidence that the applicant has procured independent office measuring not less than 10' x 10' in size for carrying on the money changers' business and an undertaking that no other business activities of whatsoever nature will be conducted in the said premises. This requirement, however will not be applicable on hotels and curio shops working as money changer's office, if it is not located in a suitable place. The report from the police authority that the applicant(s) is/are not involved in any illegal activity. The Money Changers who have not yet obtained the licenses from the State Bank (unlicensed Money Changers) will, abide by the following terms and conditions:They will restrict their activities to purchase of foreign currency notes, coins and foreign currency travelers cheques issued outside Pakistan and sale of foreign currency notes and coins only, from a fixed premises with space measuring not less than 10 ft. by 10 ft. in size. They will not include words such as bank, financial institutions, Investment Company, trading company, Real Estate Company or any word inactive other money changing business. The will not undertake banking business, e.g. accepting of deposits, advancing of loans, issuance of letters of credit, discounting of bills of exchange, purchase or sale of stock or securities, release of foreign exchange for any purpose, purchase and sale of gold and silver in any form or the precious metals or any other banking activities. All purchases and sales by the Unlicensed Money Changers should be started by receipts / vouchers. A notice advising the customers of the necessity of obtaining receipts for all purchases of foreign currency notes / coins and travelers cheques or sale of foreign currency notes and coins shall be prominently displayed by them.

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Purchase and sales by them will be undertaken at rates within the band to be announced daily by the Forex Association of Pakistan. The will make their own arrangement to procure the stock of various currency notes and coins for meeting their daily requirement as also to dispose of their surplus holdings. They will also ensure that the foreign currency notes handled by them are genuine. They will not b entitled to make any purchase of foreign currency notes / coins from any Authorized Dealer against payment in rupees. They will, upon State Bank's directive, provide all books of account and other record relating to his business at any time and for any particular period to the State Bank. They (Unlicensed Money Changers) will send to the Director, Foreign Exchange Department, State Bank of Pakistan, Central Directorates, Karachi a daily report of their transactions in a prescribed form on fax Nos. 2422083, 2417865, and 2416608. Strict action will be taken those who do not comply with the above terms and conditions Registration & Licensing Procedure: The following is the registration & licensing procedure for exchange companies: As per F.E. Circular No. 09, July 30 2002, the applicants interested in formation of Exchange Companies would, in the first instance apply on prescribed form (annexed herewith as annexure A) to State Bank of Pakistan (hereinafter referred as SBP) for obtaining a NOC. In case the NOC is denied, the State Bank will give reasons for such refusal. On the receipt of this NOC from the SBP, the applicant will submit an application to SECP for incorporation under the Companies Ordinance, 1984. The registration procedure for registration of Exchange Company with SECP is same as for other limited companies. To know about company registration procedure with SECP please refer our another document Company Registration Procedure already uploaded at SMEDA website. The minimum authorized and paid-up capital of the exchange company would be Rs. 200 Million and Rs.100 Million, respectively Paid-up capital of the company will have to be increased to Rs.200 Million within 3- years from the date of incorporation. 25 percent of the

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Capital shall be maintained as Statutory Liquidity Reserve (SLR) with SBP in the form of unencumbered approved government securities. State Bank would extend current account and SGLA facilities to Exchange Companies. After the Exchange Company is registered by SECP, the applicant would apply to SBP for issuance of license for commencement of operations. An application processing fee of Rs. 200,000 (nonrefundable) shall be charged by SBP. A pay order/draft for this amount favoring SBP should accompany the application for issuance of license. SBP may, after scrutinizing the application for issuance of license duly made in accordance with the regulations and after having been provided with all information, documents and reports as may be required, grant or refuse to grant the license. In case of refusal, SBP would assign reasons for such rejection. However, issuance of the license will be restricted once the limit has been reached, which will be at the sole discretion of SBP. If an application for issuance of license is submitted, complete in all respects, the decision as to the issuance of license or otherwise shall be intimated within one month from the date of submission of such application. The license shall be issued for a period of three years, renewable thereafter for the same period. The license will not be Transferable to any other entity of whatsoever nature, through any means. Governing Rules & Regulations: The following rules & regulations should be followed by exchange companies for its operations: The trade name of the Exchange Company shall not include the word "Bank", "Financial Institution", "Investment/Commercial/Finance/Real Estate" or any other description that indicates activities other than exchange business. The Exchange Company shall be authorized to deal in foreign currency notes, coins, postal notes, money orders, bank drafts, travelers cheques and transfers. The Exchange Companies will be prohibited to engage in any other activity such as deposit taking, lending etc., directly or indirectly.

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The Exchange Companies would be allowed to buy and sell foreign exchange from/to individuals in Ready value only. In addition to the individuals, Exchange Companies would also be allowed to sell foreign exchange to incorporated companies for remittance on account of royalty, franchise, technical fee, repair and maintenance etc., after obtaining No Objection Certificate from the Designated Authorized Dealer. Exchange Company would be allowed to buy and sell foreign exchange in Ready, Tom and Spot value dates from/to other Exchange Companies. Exchange Company would be allowed to sell foreign exchange in the Ready, Tom and Spot value dates, with banks as counterparty (Interbank Market). The companies would be allowed to have foreign participation in their equity up to a maximum of 50%. State Bank would permit repatriation of profits in proportion up to the extent of foreign equity. Every branch of a company would be allowed to offer the complete range of services that the Exchange Company is authorized to offer. In addition to full-fledged branches, Companies will be allowed to have franchise arrangements with other entities. However, the responsibility in terms of adherence to SBP regulations will continue to reside with the licensee who shall be held responsible for any violation of SBP regulations committed by the franchisee. Besides the branches, the companies shall also be allowed to open Currency Exchange Booths (CEB) all over the country at public places such as airports, hotels etc. The scope of activities for CEB's would be limited to currency notes/coins exchange and encashment of travelers cheques only. The Directors of an Exchange Company must possess appropriate knowledge to carry out the exchange business. They should not have been convicted of any offence involving moral turpitude and shall not have failed to honor their liabilities towards banks, tax authorities or other

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government agencies and shall not have been declared bankrupt nor have been subjected to attachment of their assets by the courts. Directors of Exchange Companies will not be allowed to hold the Director's office in more than one Exchange Company. The directors shall also be barred to borrow or avail credit or defer payment with the Exchange Company in any form. The company shall conduct the exchange business only from such premises as may be approved by the State Bank. The premises should preferably be located at an easily accessible location and shall be relocated only after obtaining prior approval from the State Bank. The Companies shall ensure that facilities such as telephone, fax, Telex/SWIFT, hardware/software and electronic cash registers etc. are available. The companies shall also equip themselves with necessary qualified staff to properly manage computerized reporting to the State Bank. The Exchange Companies shall limit their exposure at the close of business each day at a level not higher than 50% of their capital base. The method to determine exposure shall be the same as has been prescribed for banks i.e. higher of the overbought or oversold positions at the close of day. All dealings between an Exchange Company and its customers shall be supported by official receipts. Such receipts shall be prepared for every transaction in duplicate, one of which shall be provided to the customer and the other shall be kept in record for a period to be specified by SBP. Every receipt provided to the customer shall be sequentially numbered and also bear the name of the Exchange Company, date, nature of transaction i.e. sale/purchase/transfer, currency dealt, exchange rate and initials of dealer/authorized employee. For currency exchange transactions exceeding USD 10,000 (or equivalent in other currencies) the name, address and ID/Passport Number of the customer shall also be mentioned on the receipt after due verification.

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For transactions involving transfers/remittances, the names, addresses and other particulars of both the remitter and beneficiary shall be mentioned on the receipts regardless of the amount. A notice advising customers to obtain receipts shall be prominently displayed at each branch/CEB/franchise. Another notice declaring the exchange rates applicable for currency sale/purchase/transfer shall also be displayed at a prominent place in each branch/CEB/franchise. For the purpose of annual statutory audit, the Exchange Companies shall appoint only those auditing firms that are on the approved list of the State Bank for audit of banks. The Exchange Companies shall maintain proper accounting records and submit the same in such form, as may be required by the State Bank. The company shall invariably submit to the State Bank, within a period not exceeding three months from the date of closing of its financial year, a signed copy of its year end audited accounts. The financial year of the company will be from 1st July to 30th June. The company shall fully abide by all the regulations, instructions, directives, circulars and other communications issued by the SBP and subject its records and documents to the examination, inspection and supervision of SBP. It shall also ensure compliance with all other laws of the land; in particular the provisions relating to counterfeit coins and banknotes. SBP reserves the right to inspect the activities of Exchange Company at any time it finds appropriate to ensure adherence to the regulations issued by SBP. The company shall adopt proper techniques of internal control such as internal audit. Any change in the Memorandum and/or Articles of Association of the company shall only be made after obtaining prior approval from the State Bank. How currency exchange (FOREX) market works Written by article default Sunday, 02 August 2009 20:22

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I bet you are well aware of the existent of Forex trading nowadays. Forex market exists wherever one currency is traded for another. Forex, or Foreign Exchange Market, is generally works as an international currency exchange market. Investors and speculators are allowed to trade currencies from all around the world thru Forex trading. Forex is a very unique type of trading where traders are buying and selling 'money' in the same time. The trades are done in pairs, such as Euro/JPY, USD/CHF, and CAD/USD. It is the world largest trading market where an average of $1.9 trillion trades is done on a daily basis. The turnover rates in FOREX are nearly 30 times larger than the total volume of equity trades in United States. Despite its large volume of trades done daily, Forex is relative new to the publics nonetheless. It is only made available to publics in year 1998 where big sized inter-bank units are sliced into smaller pieces and offered to individual traders like you and me. Before that, Forex is a game only for banks, multi national cooperation, and big currency dealers. Only those with large business size and strong financial background were permitted to trade foreign currencies. Facts about Forex market As a matter of fact, large international banks are still the major traders in currency exchange market. Deutsche Bank is one of the top currency traders; along with other major banks like UBS, Citi Group, HSBC, Barclays, J. P. Morgan Chase, Coldman Sachs, ABN Amro, Morgan Stanley, and Merril Lynch; these banks are said to be responsible for more than 70% trades in currency market. When you are trading Forex with currency dealer, the Forex quotes might look a bit different from our previous example. Often, a two-sided quote, consisting of 'bid' and 'ask' price, is listed when dealing with currency brokers. For example, EUR/USD 1.2385/1.2390: 1.2385 is known as the 'bid' price while 1.2390 is commonly known as the 'ask' or 'buy' price. The 'bid' is the price at which you can sell the base currency; while the 'ask' is the price at which you can buy the base

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currency. As you study the numbers, you might realize that the two-sided currency price is quoted against you. Traders are forced to buy the currency in a higher price than the selling one. This is done because FOREX trades are done without any commission chargers. Thru quoting currency 'bid & ask' price differently in this way, the currency brokers are manage to make profit without charging their client commission fees directly. Learn more on Forex quotes. Fundamental analysis and Technical analysis in Forex Fundamental Analysis refers to the study of the core underlying elements that influence the economy of a particular entity. As in Forex trading, government policies, bank policies, natural disasters, and speculators mood are some of the fundamentals considered to predict the currency market trends. Fundamental FOREX traders will review a country economy's situation base on these fundamental elements and respond accordingly. To gain max, fundamentalists often apply precise method to convert study's results into accurate entry/exit price indicator. Technical Analysis, on the other hand, is a completely different story. Instead of reviewing on the fundamental issues, traders from the technical side define market movement according to data purely generated from the market. The term 'Technical' is applied in all trading fields, from commodity stocks exchange to option trading, from Forex to futures. Generally, the purpose of technical analysis is to find potential price reversal or pivotal points. These points basically refer the change of market trends, which then indicates when to enter or exit from the market. It is important to know that as with any other techniques in your trading system, these technical analysis indicators could be used alone or with other indicators. Traders are always recommended to learn more different technical methods to analyze different market data because none of these techniques are 100% accurate and 100% foolproof. Taking example of the 'price' data and the 'time' data, which are widely used by FOREX trader. There are some techniques consider solely on the 'price' factor, while some solely rely on the 'time' factor. The fact is if you know both technical methods, you can take both price and time

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into consideration during estimating market future trends. This will of course then reduce the risks of losing money in Forex market. Also, it would be wise if traders combine both technical and fundamental techniques when trading Forex, as a country currency value depends a lot on fundamental variables such as war, change of national leaders, terrorism attacks, as well as natural disasters. Without a doubt, Forex is gaining its popularity fast against other kind of trading. No limited market access, no liquidity issues-after market hours, zero commission fees, low capital requirements with high leverage rates, and no restrictions on short selling -- Forex can be very beneficial to a variety of people. Like any other trading business, if you are new to it, best advice you can get is to learn and practice more before you test your 'wings'. Seminars, eBooks, Internet, papers, video courses - all these are helpful to raise your confidence level before you trade with your real hard-earn dollars. SWIFT Wire transfer, or T/T as its commonly called in Pakistan, is one of the safest ways to receive payment from foreign sources. SWIFT is a secure messaging standard that banks around the world use to send instructions to each other to make payments on their behalf. This is the basis of international wire transfer. Budding Internet entrepreneurs and freelancers may want to know how to receive money via this method so I have written this guide for them. Obtain bank details Each bank in the SWIFT network has its own alpha-numeric Bank Identification Code (BIC). In Pakistan this is commonly referred to as the SWIFT code and is one of the critical pieces of information that you will need to give the sender before he can remit your money. Go to your bank branch and ask the customer service personnel to help you obtain the following information about your bank: Name Address SWIFT code (BIC) ___________________________ ___________________________ ___________________________

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Most banks in Pakistan are connected to the swift network via a correspondent bank. This correspondent bank acts on their behalf. If your bank has a correspondent bank then obtain this information about it: Name Address SWIFT code (BIC) ___________________________ ___________________________ ___________________________

The number of your banks account with them. If the sender is an individual you can receive the money into a foreign currency or rupee account . But if the sender is a company then according to State Bank of Pakistan rules your earnings must be credited to a Pakistan rupee account. So keeping this in mind, note down your own details: Full name Address Bank account title ___________________________ ___________________________ ___________________________

Bank account number ___________________________ Type of account ___________________________

Sr.No.Name of 1 2 3 4 5 6

053-7610914, 7611260-1 theTelephone Nos./ Fax Nos.

Address Shop # 9, Basement, Al Fateh Plaza,

Aftab Exchange Fax: 053-7534850 Exchange

8 7

Company-B (Pvt) Ph: Al-Pine 021-4385625- Naya Bazaar, Kharian Companies-B Al-Quaim Money Ph: 081-2664783 Shop # 4-5, Near Yazdan Khan High Ltd. 7,4544999,4555698 International Ph: 021-5371360, 5868784 83-A, Block-2, Khalid Bin Waleed Road, School, Alamdar Road, Exchange Fax: 081-2665883 Ph: 021-4553619 Exchange Fax:021-2219342, 2219344 P.E.C.H.S. Karachi. Fax: 021-5378677 Best Way BC-8, Jason Centre, Block-9, KDA Company-B Quetta. Ph: 021-2774305,2734101 1-A Ground Floor, Opp: Tower, Cinema, Nigar I. I. Capital Exchange Company-B (Pvt) Fax: 021-2219345 G-13, # 5, Clifton, Karachi. Scheme Saima Trade Exchange (Pvt) Ltd. 11-A, Jinnah Stadium Shopping Center Hari OdhaniRoad, Karachi. Chanda Exchange Ph: 055-3258021 Ltd. Chundrigar Street, Pan Company-B (Pvt) Fax:021-2774417 Company-B (Pvt) Ph: 055-3734872 A/3 , Road, Floor, Alfatah Chambers, East West (Pvt) Fax:021-4533459,4533174-5, SialkotGroundGujranwala. Mandi, Nankwada, Karachi. Company-B Ltd. Ltd. Exchange Gohar Exchange 4532022-23 Fax: 021- C.C.Area, Block-7/8 Ltd. Company-B (Pvt) 4531191 Ltd. Limited
16 | P a g e K.C.H.S Near Duty Free Shop Shahrah-

e-Faisal, Karachi.

Great Union 10 9 11 12 13 14 International Exchange

Ph: 051-5563788

16 15

17 19 18 20 21 22 23

24 25 26

Ph: 021-2461921 Office Floor, Mall Plaza, Floor, Mall , Fax: 051-5517789 21,Ist No.203-204,2nd The Shams Office No.7, Mezzanine Floor, 47-W, Chamber, Shahrah-eExchange (Pvt) Ph: 051-2270128 Fax: 021-2461922 company-B Saddar, Rawalpindi Karwan Ph: 081-2833940 Fax: 081- Shop # Arcade, Jinnah 1-27/34, Shahrah-e-Iqbal, Quetta. Islamabad (Pvt) Fax:0221-9200861-5,784090 Dossul Sakhi Wahab Complex, Quaid-eCompany-B Ph: 051-2270337 25-26, Liaquat, Karachi Ltd. 2835170 Exchange Shop # Blue Area, Islamabad. Exchange Azam Road, Cantonment, Ltd. Fax: 0221-781566 Madina Exchange Ph: 021-4636158, 4630170 Avenue,1, Mezzanine Floor, Asia Pacific Company-B (Pvt) Ph: 021-34970044 Mega Currency Fax:-021-4636158 Suit # 1, Islamic Plaza, Block 13B, Main Centre, Rashid Minhas Company-B (Pvt) MARS Exchange Hyderabad. Company-B (Pvt) Ltd. Masters Fax:021-4529854-6 University Road, Amber Pride, 13-A Exchange (Pvt) Ph: 021-34801179 Money 2-Ground Floor, Ltd. Road, Karachi. Company-B Ltd. Muhammadi(Pvt) Ph: 021-4600860-1 Company-B Block-6, Currency Karachi. PECHS, Nursery, Fax : 021-4527300 Ltd. Ph: 021-4600862 091-2213170- S-4 Flak Naz Heights, Main Shahra-e Exchange Fax: Ltd. Exchange Shahrah-e-Faisal, Karachi. Orient Exchange Ph: 042-5713728,5757230 Shop No. 3, MCB Buliding, Chowk Company-B (Pvt) 6452,2568353 Faisal, Karachi Company-B (Pvt) 091-2552420 Yadgar , Peshawar Company-B (Pvt) Ph: 051-5538721 Ltd. Fax: 042-5750480 Premier B-1, Rahim Complex, Main Market, Ltd. Fax: 051-5774792 U-54/A, Raja Bazar, Rawalpindi. Rajgan Exchange Ph: 051-5585302 Ltd. Gulberg-II, Lahore. Exchange SwissExchange Ph: 021-5221596-97 Suit 1st 507, 5th Floor, Uni The Mall, SKY 18- # Floor, Mall Plaza, Shopping Company-B (Pvt) Fax : 051-5790732 Company-B (Pvt) Ph: 021-2463296 & 2463297 Room # 305, 3rd Floor, Ruby Center, International (Pvt) Fax: 021-5650608,5221598 Center, Abdullah Haroon Rawalpindi. Company-B Ltd. Ltd. Boulton Market, Talpure Time Exchange Fax: 021-2419775 Exchange Road, Saddar, Karachi. Ltd. 042-5892350-52 Company-B (Pvt) Ph: 042-6278885,6373700 Road, Karachi Company-B

Cell:03001-G Sadiq Plaza, 69-The Mall, Lahore. Union Exchange Ph: 042-6307938 32-G, DHA, Lahore. United Exchange Fax: 042-6362833 Ltd. Ltd. (Pvt) 27 Usman Ph: 042-6271592 055-4218996,4445910, 4-TF, Japan Centre, Cooper Road, Universal (Pvt) 9403947 Fax: 042-5892352 Company-B Ltd. Fax: Co.-B (Pvt) 28 Ph: 042-5751039,5751049 Basement, New Safina Market, Rail 4448546 International Lahore. Exchange Ltd. World Express Ph: 021-2437546-8,2443219- Shop # C-5, 3rd Floor, Parker House, I. I. World Exchange Fax:055-4212629 21- GF, Center Point, Main Boulevard, Exchange (Pvt) Fax: 042-5715979 Bazar, Gujranwala. Company-B 30 World Wide Ph: Exchange (Pvt) 20 051-2820788 , 2206644 Chundrigar Road, Karachi. 29 Gulberg III, Lahore. Company-B Company-B Ltd. REGISTRATION(Pvt) Fax: 021-2437600 FORM 051-2820844 Exchange Company-B Shop No. 9 , Block 46, Madni Plaza, Ltd. Ltd. (Pvt) ANNEXURE A (Pvt) Company-B Ltd. Blue Area, Islamabad. APPLICATION FORM FOR ISSUANCE OF LICENCE TO EXCHANGE COMPANY Ltd. The Director, Exchange Policy Department, State Bank of Pakistan, Karachi Dear Sir,

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We, M/s. --------------------------------------------, hereby apply for issuance of NOC to our proposed Exchange Company. As desired, we give necessary information on the enclosed format. Duly attested copies of Memorandum of Association and Articles of Association are enclosed herewith. Yours faithfully, Signature:____________________ Name:_______________________ Proposed Designation:___________________ Name of the proposed Exchange Company:_____________________________ Address:_______________________________ Date:_________________________________ BASIC INFORMATION 1. Name of proposed Exchange Company__________________________________ 2. Expected date of Incorporation_________________________________________ 3. Proposed place/location of Registered Office & Head Office:___________________________________________________ 4. State whether the company is private or Joint Venture:________________________ 5. Previous Application (gi1ve particulars of any Application previously made to SBP in this regard):__________________________________________________________ 6. Particulars of the Directors i. Give names, business and addresses of the Directors of Exchange Company. ii. Give shareholding pattern of Directors in the proposed Exchange Company. iii. Give complete resume of each Director with his/her educational and professional/background,working experience etc. (on separate sheet). 7. Give a brief description of the system of supervision and internal controls of the proposed Exchange Companies:___________________________________________

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8. Give details of proposed Authorised & Paid-up capital of the proposed Exchange Company:______________________________________________________________ 9. Number of branches/booths/franchise arrangement alongwith their location, address etc. for which license is required:___________________________________ 10. Detailed feasibility report of the proposed Exchange Companies encompassing all factors including Technical, Market, Management & Financial viability of such

company:_______________________________________________________________ 11. Details of technology to be used i.,e. computer/swift/fax for the

transactions:____________________________________________________________ Note: (use additional pages, if necessary)

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Exchange Companies ready to replace money changers With a view to further liberalize the foreign exchange regime in the country and unify theforeign exchange markets, the State Bank of Pakistan has initiated the process of establishing Exchange Companies by inviting applications for issuance of licenses to these Companies. An Ordinance to this effect has been promulgated with immediate effect. It was in March last year that the then Economic Advisor of the SBP, Dr. Mushtaq A. Khan, and former Foreign Exchange Advisor Hanif Akhai floated the idea of creating exchange companies. They had co-authored a confidential paper wherein some practical steps were suggested to get Pakistan rid of foreign exchange crisis: Converting the business of moneychangers into exchange companies was one of them. The idea won the blessings of the MR But the Fund made its own observations on this issue and secured assurance from the SBP that the rules of business of the exchange companies would be so designed that they could not be used for money laundering and illegal transfer of funds. CONCLUSION Unlike the money changers, whose scope of business is limited, the Exchange Companies would be authorized to deal in foreign currency notes and coins, postal notes, money orders,, bank drafts, traveler's cheques and transfers. However, they would be prohibited to engage in any other activity similar to banks like deposit taking, lending etc. The Exchange Companies, besides purchase and sale of foreign exchange from and to individuals, will also sell foreign exchange to corporate bodies. The Exchange Companies will also be allowed to sell their surplus foreign exchange in the interbank market, which will provide additional liquidity and help in deepening the interbank foreign exchange market. Commercial banks will also be allowed to establish Exchange Companies and carry out the sale and purchase of foreign exchange through these companies. The existing Money Changers will continue to function for the next two years. However, during this period, no new license for Money Changers business will be issued. REFERENCES

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 http://en.wikipedia.org/wiki/Money_changer http://en.wikipedia.org/wiki/Currency_transaction_report http://www.dollareast.com/ http://findarticles.com/p/articles/mi_hb092/is_1_34/ai_n28995284/ http://findarticles.com/p/articles/mi_hb092/is_n10_v21/ai_n28596322/ http://www.currency.com.pk/ http://www.inamlawassociates.com/files/Money_Exchange.32052234.pdf

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