SBP delegates foreign share registration powers to ADs to ease investment flows

In a move aimed at improving ease of doing business and facilitating foreign investment inflows into Pakistan, the State Bank of Pakistan has delegated powers related to the registration of shares issued or transferred to foreign investors to Authorised Dealers (ADs).

In a circular issued on Monday, the central bank said that “it has been decided to delegate the functions of registration of shares/units on repatriable basis issued/transferred by local companies/funds to the non-residents and designation of ADs for remittance of dividend and disinvestment proceeds to non-resident shareholders/unitholders to ADs”.

Furthermore, the documentary requirements for registration of shares/units on a repatriable basis have been simplified.

“Accordingly, relevant provisions of the Foreign Exchange Manual (FEM) have been suitably amended, and Standard Operating Procedures (SOPs) have also been developed and made part of the revised instructions,” the central bank said.

The revised instructions will become effective one month after issuance of the circular to allow ADs sufficient time to establish the required institutional arrangements.

Separately, the SBP, as part of its strategic goal to enhance efficiency and effectiveness of the financial system, also announced the implementation of a digital “Non-Resident Shareholding Registration System (NSRS)” aimed to streamline and automate the record keeping of registration of non-residents’ shareholding in locally incorporated companies, and subsequent repatriation of dividend/ disinvestment proceeds.

Under the new mechanism, ADs will be required to submit monthly reports to the SBP regarding designation of banks, share issuance, dividend repatriation, and disinvestment transactions through the Data Acquisition Portal (DAP). The first reporting cycle for July 2026 transactions will be due by the fifth working day of August 2026.

The central bank has also directed banks to submit historical or “legacy” data related to dividend and disinvestment transactions in three phases.

“Phase I: From January 1, 2021, to June 30, 2026, within four (04) months of issuance of this circular.

Phase II: From January 1, 2016, to December 31, 2020, within six (06) months of issuance of this circular.

Phase III: From January 1, 2006, to December 31, 2015, within one (01) year of issuance of this circular.

After the conclusion of Phase-III, the ADs shall submit a compliance report within 15 days, duly signed by their Group Head Compliance, confirming that the data submitted in the three phases is complete in all respects and is free of errors.”