Is forex trading legal in Pakistan?
Foreign exchange in Pakistan is regulated by the State Bank of Pakistan under the Foreign Exchange Regulation Act, 1947. SBP has repeatedly warned that offshore online forex, margin and CFD trading platforms are illegal for residents, and that funding them can make the user liable to proceedings.
By the TradeFather education team · Updated 27 Oct 2026 · Educational content, not financial advice
- Only SBP-authorised dealers and exchange companies may deal in foreign exchange in Pakistan.
- SBP's 2016 circular and 2022 advisory declare offshore forex/margin/CFD platforms illegal for residents.
- SBP warned that anyone buying such platforms' services and remitting foreign exchange to them is liable to be proceeded against.
- Locally regulated alternatives exist, such as currency futures on the Pakistan Mercantile Exchange (PMEX), overseen by SECP.
Who is allowed to deal in foreign exchange
Section 4(1) of the Foreign Exchange Regulation Act, 1947 provides that, except with the general or special permission of the State Bank, no person other than an authorised dealer may deal in foreign exchange in Pakistan, and no resident may do so outside Pakistan.
SBP's Exchange Policy Department regulates the regime; authorised dealers (banks) and licensed exchange companies handle currency conversion and remittances. Securities and derivatives markets are overseen by the Securities and Exchange Commission of Pakistan (SECP).
What SBP has said about online forex platforms
In EPD Circular Letter No. 01 of 2016, SBP drew attention to illegal offshore foreign exchange trading, margin trading and CFD websites, apps and platforms, and the resulting outflow of foreign exchange.
In May 2022 SBP issued a public advisory naming platforms such as OctaFX and Easy Forex as illegal, stating they are regulated neither by SBP nor by SECP. It clarified that buying products or services of such offshore platforms — and remitting foreign exchange to them through any payment channel, directly or indirectly — is prohibited and makes the person liable to be proceeded against under the law.
These advisories target offshore platforms soliciting Pakistani residents. They are not a comment on learning about forex, practising on demo accounts, or using educational tools.
What residents can do instead
Use SBP-authorised banks and licensed exchange companies for genuine currency needs.
The Pakistan Mercantile Exchange, regulated by SECP, lists standardised currency futures for eligible participants.
Education, chart study and demo trading carry no remittance and no regulatory issue.
Check SBP and SECP official lists; a platform's own licence claims are not verification.
Frequently asked questions
+Is forex trading legal in Pakistan?
Dealing in foreign exchange is restricted to SBP-authorised dealers. SBP has declared offshore online forex, margin and CFD platforms illegal for residents and warned that funding them is prohibited.
+Is OctaFX legal in Pakistan?
No. SBP's May 2022 advisory named OctaFX among illegal offshore platforms regulated neither by SBP nor by SECP.
+Can I practise forex on a demo account?
Demo trading involves no money and no remittance, so it does not engage the foreign exchange restrictions SBP warns about.
+Is this legal advice?
No. It summarises public SBP and SECP material for education. Confirm current rules on sbp.org.pk and secp.gov.pk or consult a professional.