ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has proposed a framework that seeks to foster innovation while safeguarding market integrity and investor protection for “Regulating Algorithmic Trading in Pakistan”.
In this regard, the SECP has released a Concept Paper titled “Regulating Algorithmic Trading in Pakistan” on Thursday.
According to the regulations, the global rise of algorithmic trading, besides offering numerous advantages in speed and efficiency, also presents a set of new challenges.
To address these, the SECP’s framework proposes clearly defined roles for key stakeholders. Exchanges will oversee registration, testing, and the assignment of unique identifiers for algorithmic traders.
Brokers must implement strong control mechanisms, comply with audit and governance requirements, and ensure rigorous oversight of their algorithmic trading activities.
Meanwhile, third-party algorithm providers will be required to adhere to applicable laws and regulatory standards.
Recognising that Pakistan is in the early stages of regulating algorithmic trading, the SECP recommends a phased implementation approach. Initially, access will be limited to institutional investors, with potential expansion to retail investors in later phases, contingent upon market readiness, risk assessment, and accumulated experience.
The Concept Paper is now available for public feedback on the SECP’s website. Stakeholders may submit comments by June 14, 2025, via email at [email protected].
Copyright Business Recorder, 2025
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