981112

For business information, annual reports, laws, ordinances, regulations and articles.

981112

STATE BANK OF PAKISTAN
SECURITIES DEPARTMENT KARACHI

SD. Circular No. 11
November 12, 1998

All Scheduled Banks and NBFIs,

Dear Sir,
GUIDELINES FOR ISSUE AND TRADE OF SPECIAL U.S. DOLLAR BONDS ‘REGISTERED’ OR ‘BEARER’.

Please refer to Securities Department Circular, Nos. 06, 07, 08, 09 and 10 dated 4th August, 27th August, 15th September, 5th October and 6th November, 1998 respectively. In supersession of SD Circular No. 08, all Banks/NBFIs are advised to adhere to the following guidelines, in addition to instructions contained in above mentioned Circulars except SD Circular No. 08.

1. Bonds in their present shape will be treated as ‘Registered’. Each ‘Office of Issue’ is required to get an application form filled by every purchaser of ‘Registered’ category of Special U.S. Dollar Bond. Specimen of application form is attached. Photocopies of this form may be used. These forms should be retained by the offices of issue along with other necessary records involved with the issue of these Bonds.

2. Transfer of ‘Registered’ category of the Bonds can be effected only through those ‘Offices of Issue’ from which Bonds were originally issued and registered. An application for transfer of Special U.S. Dollar Bond has to be got filled by the respective office of issue both by transferor and transferee. Specimen of form of application for transfer of Special U.S. Dollar Bond from one person to another person is attached. Photocopies of this form may be used. These forms should be maintained by the offices of issue alongwith other necessary information involved with the transfer of Bonds.

3. The same printed bonds will be used for ‘Registered’ and "Bearer’ category. Each ‘Office of Issue’ is required to score out the word ‘Registered’ printed in the text of the Bond and should affix a rubber stamp, in indelible ink, with the word ‘Bearer’ in bold print in the place provided for the name of purchaser, before selling the Bond to person desiring ‘Bearer’ category of the Bond. Offices of Issue are required to maintain the necessary details of sales of ‘Bearer’ Bonds without asking the purchaser to fill the form used for ‘Registered’ category.

4. Transfer of ‘Bearer’ category of Bond can be effected by delivery.

5. ‘Bearer’ or ‘Registered’ category of the Bonds can be issued to holders of Dollar Bearer Certificates (DBCs)/Foreign Currency Bearer Certificates (FCBCs) desirous of exchanging these with Special U.S. Dollar Bonds. Foreign Currency Bearer Certificates (FCBCs) denominated in foreign currency other than U.S. Dollar will be converted into U.S. Dollars by crossing the State Bank Spot Buying Rate for U.S. Dollars with the rate of these currencies published by the Foreign Exchange Rates Committee in its Exchange Rate Bulletin. Excess face value of DBCs/FCBCs, if any, over face value of Special U.S. Dollar Bonds, to be issued in exchange of DBCs/FCBCs, will be paid to holders, in Pak Rupees at the prevailing official exchange rate. The Office of Issue will maintain proper record of Special U.S. Dollar Bonds issued in exchange for Dollar Bearer Certificates/Foreign Currency Bearer Certificates.

6. Offices of Issue can sell the Bonds either in ‘Registered’ or ‘Bearer’ category to persons against payment in U.S. Dollars according to Rule 5 (3) of Special U.S. Dollar Bonds Rule, 1998.

7. The rates of profit and facility of payment of profit in U.S. Dollar to residents would also be applicable to the Special U.S. Dollar Bonds already issued i.e. prior to 06-11-1998.

8. A holder of a bond of ten years maturity shall be entitled to exchange it for a bond of the new reduced maturity period i.e. 3, 5, or 7 years and the date of issue of the new bond shall be taken to be same as of the ten years bond purchased earlier. Record of ten years bonds exchanged with bonds of reduced maturity period should be properly maintained.

9. Issuing Authorities are advised to report daily, statements of sales of ‘Registered’ as well as ‘Bearer’ category of Special U.S. Dollar Bonds in the Forms SUSDB-’Registered’ and SUSDB-’Bearer’ to the Chief Manager, SBP, Karachi/Lahore Specimen of these forms are enclosed.

10. Banks and Non-Bank Financial Institutions are requested to approach Securities Department, State Bank of Pakistan for removal of any difficulty, which they may encounter in the issue of these bonds. An updated version of the Special U.S. Dollar Bonds Rules, 1998 incorporating amendments upto 6th November, 1998 is enclosed for convenience.

Yours faithfully,

Sd/-
(Muhammad Suleman)
Joint Director
Phone No. 2429734

APPLICATION FOR PURCHASE OF SPECIAL U.S. DOLLAR BONDS (SUSDBs)
(Registered Category)

(To be completed by the Applicant)
NAME(S) & ADDRESS OF PURCHASER(S)	MODE OF PAYMENT

1.___________________________	Foreign Currency Account/COI No._______
	Other (Specify) ______________________
	Cheque No./Date_____________________
National Identity Card No:	Bank:______________________________
(Please attach copy of NIC or a photo copy of Passport in the case of Foreign National)	Branch:_____________________________
2.-----------------------------------------------------	Total (in U.S. Dollars)
------------------------------------------------------
National Identity Card No: (Please attach copy of NIC or a photo copy of Passport in the case of Foreign National)	SINGLE/JOINT Joint ‘A’:- Payable to holders jointly or to either with the written consent of the other
FOR COMPANIES/FIR MS
Name of Company/Firm____________________	Joint ‘B’:- Payable to either
	*strike out whichever is not applicable
NOMINATION
In the event of my/our death, I/we nominate the following to receive the value of the Special U.S. Dollar Bonds.	I we hereby agree to abide by the rules applicable for Special U.S. Dollar Bonds Purchased.
	SIGNATURE(S)
Name & Address Share	of Purchaser(s)
1.----------------------------------------------------- 2.----------------------------------------------------- 3.-----------------------------------------------------	Received Special U.S. Dollar Bonds mentioned below. SIGNATURE of purchaser/Agent/Messenger
Signature(s) of Purchaser(s) ____________________________

FACE VALUE	NO. OF SPECIAL U.S. DOLLARS BONDS REQUIRED			TOTAL FOR VALUE U.S. DOLLAR
	3 Years	5 Years	7 Years

U.S. $ 100/-
U.S. $ 1,000/-
U.S. $ 10,000/-
U.S. $ 100,000/-

Total Number of SUSDB(s)				(Grand Total U.S. $)

TO BE COMPLETED BY THE OFFICE OF ISSUE

Registration No.

Serial No. Of Special U.S. Dollar Bonds Issued	Face Value (U.S. Dollars)	Date Of Encashment & Initial Of The Issuing Authority	Payment Of Profit On Special U.S. Dollar Bond And Every Change Affecting If Such As Transfer, Issue Of Declaration In Lieu In Case Of Lost Bonds Etc. Should Be Noted Hereunder And Initiated By The Issuing Authority*

*Separate sheet can be used if needed.

DATE.____________

SIGNATURE OF ISSUING AUTHORITY

‘Registered Category’

APPLICATION FOR TRANSFER OF SPECIAL U.S. DOLLAR BONDS (SUSDBs), FROM ONE PERSON TO ANOTHER PERSON

Date of Original application for purchase of SUSDB(s)---------------------------
Original Registration No.----------------------------------------------------------
I/We-------------------------------------------------------------------------------the holder(s) of the undermentioned Special U.S. Dollar Bond(s) request you to transfer these SUSDB(s) to Mr./Miss/Mrs.----------------------------------------------I/We hereby declare that on the transfer of said SUSDB(s) to Mr./Miss/Mrs.------------------------------------------------------------------in accordance with the Rules applicable for Special U.S. Dollar Bonds.

I/We relinquish all claim to them.

PARTICULARS OF THE SPECIAL U.S. DOLLAR BONDS TO BE TRANSFERRED

Date of Issue	S. No. of SUSDB(s)	Denomination (US$)	Maturity

Total No. of Bond(s)	Total Value U.S. $--------------------------
	(U.S. Dollars--------------------------------
Name of Transferee(s) ----------------------	Name of Transferor(s) ----------------------
Signature of Transferee(s)	Signature of Transferor(s)
of SUSDB(s)	of SUSDB(s)
N.I.C. No. ----------------------------------	N.I.C. No. --------------------------------
(Please attach Copy of NIC or a photo copy of Passport in the case of Foreign National.)	(Please attach Copy of NIC or a photo copy of Passport in the) case of Foreign National.)

DECLARATION BY TRANSFEREE(S)

I/We agree to abide by the Rules applicable for Special U.S. Dollar Bonds

NOMINATION BY THE TRANSFEREE(S)

In the event of my/our death I/We nominate the following Person(s) to receive the share stated against each name.

Name and Address

1.----------------------------------------	2.---------------------------------------
3.----------------------------------------	4.----------------------------------------
	Signature of Transferee(s)

The transfer of above-mentioned Special U.S. Dollar Bonds is accepted and the same delivered to the Transferee(s).
New registration No. allotted--------------------------------------

Signature of IInd Officer
(Name & Designation)

Signature of IInd Officer Incharge
(Name & Designation)

N.B: ‘Office of Issue’ will attach, in a separate sheet, all relevant information regarding transfer transactions.

SUSDB- ‘Registered’

Daily Statement of Sale of Special U.S. Dollar Bonds
‘Registered’ Category

Bank:---------------------------Code:-----------------------
Branch:-------------------------Code:------------------------
Date of Sale------------------

Value in U.S. Dollars

3 Years Maturity			5 Years Maturity
Sold Against Frozen FCAs/COIs	Sold Against Fresh U.S. Dollar	Sold in Exchange of DBCs/FCBCs	Sold Against Frozen FCAs/COIs	Sold Against Fresh U.S. Dollars	Sold in Exchange of DBCs/FCBCs






Total:

7 Years Maturity			Total
Sold against Frozen FCAs/COIs	Sold Against Fresh U.S. Dollars	Sold in Exchange of DBCs/FCBCs





Total:

SUSDB- ‘Bearer’

Daily Statement of Sale of Special U.S. Dollar Bonds
‘Bearer’ Category

Bank:---------------------------Code:-----------------------
Branch:------------------------Code:------------------------
Date of Sale------------------

Value in U.S. Dollars

3 Years Maturity			5 Years Maturity
Sold Against Frozen FCAs/COIs	Sold Against Fresh U.S. Dollar	Sold in Exchange of DBCs/FCBCs	Sold Against Frozen FCAs/COIs	Sold Against Fresh U.S. Dollars	Sold in Exchange of DBCs/FCBCs






Total:

7 Years Maturity			Total
Sold against Frozen FCAs/COIs	Sold Against Fresh U.S. Dollars	Sold in Exchange of DBCs/FCBCs





Total:

SPECIAL US DOLLAR BONDS RULES, 1998
(Incorporating amendments upto 6th November, 1998)

S.R.O. 837(1)/98.- In exercise of the powers conferred by clause (b) of sub-section (2) of Section 3 of the Foreign Exchange (Temporary Restrictions) Act, 1998 (IV of 1998) and Section 28 of the Public Debt Act, 1944 (XVIII of 1944) and all other powers in this behalf the Federal Government is pleased to make the following rules, namely:-

1. These rules shall be called the Special US Dollar Bonds Rules, 1998.

2. These rules shall apply to the Special US Dollar Bonds issued in the denomination of $100, $1,000 $10,000 and $100,000 for a period of three, five, and seven years from date of their issue.

3. Omitted.

4. The Bonds will be registered or bearer Bonds.

5. (1) Foreign currency account holders or foreign currency Certificate of Investment holders with the scheduled banks or Non-Bank Financial Institutions shall be entitled to purchase these bonds out of their foreign currency deposits.
(2) Holders of U.S. Dollar Bearer Certificates issued under the U.S. Dollar Bearer Certificate Rules, 1991, and Five Years Foreign Currency Bearer Certificates issued under the Five Years Foreign Currency Bearer Certificates Rules, 1992 and Three Years Foreign Currency Bearer Certificates issued under the Three Year Bearer Certificates Rules, 1998 shall also be entitled to purchase these bonds in exchange for the certificates.
(3) In addition the bonds may be purchased on payment of the value in U.S. dollars provided the amount so paid does not represent:-
(a) any foreign exchange borrowed under any general or special permission given by the State Bank of Pakistan under sub-section (1) of Section 4 of the Foreign Exchange Regulation Act, 1947 (VII of 1947);
(b) any payment from abroad for goods exported from Pakistan;
(c) proceeds of securities sold and issued to non-residents;
(d) any payment received from abroad for services rendered in or from Pakistan;
(e) earnings or profits of the overseas offices or branches of Pakistani firms and companies including banks; and
(f) any foreign exchange purchased from an authorised dealer in Pakistan for any purpose.

6. These bonds shall be issued to the foreign currency account holders or foreign currency Certificates of Investment holders by the respective scheduled banks or Non-Bank Financial Institutions each one of which shall be called "Issuing Authority" and each of their offices called "Office of Issue."

7. (1) The bonds purchased under these rules shall be exempt from the levy of wealth tax for the period for which such bonds are held or until maturity of such bonds.
(2) Assets created out of the sale proceeds of the bonds by the original registered holder shall be exempt from levy of wealth tax for a period of six years reckoned from the year in which such bonds were converted from foreign currency accounts or deposits and the following five years.
(3) The immunities available to the foreign currency accounts under the Protection of Economic Reforms Act, 1992 (XII of 1992), shall apply to the bonds issued under these rules.
(4) The immunities available under the U.S. Dollar Bearer Certificate Rules, 1991, Five Years Foreign Currency Bearer Certificates Rules, 1992 and Three Year Foreign Currency Bearer Certificates Rules, 1998 shall apply to the bonds issued under these rules in exchange for such certificates.
(5) Assets created out of the encashment of bearer bonds shall be exempt from levy of Wealth Tax for a period of six years reckoned from the year in which such bonds were encashed subject to the condition that a certificate of encashment is obtained from the issuing bank in the prescribed form.

8. The investment made in these bonds shall be exempt from Income Tax. Exemption from levy of income tax on its profit and deduction of Zakat shall also be available to holders of these bonds for as long as these bonds are held by them.

9. There shall be no maximum limit for the purchase of these bonds.

10. The face value of the bonds shall be encashable on maturity in US dollars or Pakistani Rupees at the prevailing official exchange rate.

11. (1) Profit shall be payable on these bonds on completion of each period of six months reckoned upto the date of maturity or encashment whichever is earlier. The profit on these bonds shall be payable at the following rates, namely:-

a) For bonds of 3 years maturity	6 months LIBOR on the day preceding the date of payment+2%.
b) For bonds of 5 years maturity	6 months LIBOR on the day preceding the date of payment+3%.
c) For bonds of 7 years maturity	6 months LIBOR on the day preceding the date of payment+4%.

(2) The profit shall be paid in U.S. Dollars.

(3) If a bond is encashed within the period of one year from the date of issue no profit shall be paid to the bond-holder and any profit paid shall be recovered at the time of the encashment of the bond. If a seven year bond is encashed within five years of issue, the rate of return shall be the same as that of five year bond. If a five year bond is encashed within three years of issue, the rate of return shall be the same as that of three year bond and the excess profit, if paid shall be recovered at the time of encashment.

12. (1) The bonds shall be tradeable and, if encashed prior to maturity, would be redeemed in Pak Rupee at the official exchange rate prevailing on the date of encashment.
(2) The bonds shall be acceptable as collateral for raising loans in Pak Rupees.
(3) The Privatization Commission shall accept the bonds as payment against the assets being sold or privatized.
13. The Government of Pakistan may, by order, remove any difficulty arising in the operation of these rules.

Notes
1. Original rules notified on 22nd July, 1998.
2. (1st) Amendment notified on 3rd August, 1998.
3. (2nd) Amendment notified on 26th August, 1998.
4. (3rd) Amendment notified on 3rd October, 1998.
5. (4th) Amendment notified on 6th November, 1998.

(i) SD Circular No. 06 issued on 4th August, 1998.
(ii) SD Circular No. 07 issued on 27th August, 1998.
(iii) SD Circular No. 08 issued on 15th September, 1998.
(iv) SD Circular No. 09 issued on 5th October, 1998.
(v) SD Circular No. 10 issued on 6th November, 1998.

Home | About Us | Contact | Information Resources