The Securities and Exchange Commission of Pakistan (SECP) has approved the Internet Trading Regulations for the Karachi Stock Exchange to ensure effective and improved monitoring of internet-based trading activities offered by brokers in the local capital market.
The regulations comprehensively cover various aspects of internet-based trading activities while effectively addressing issues unique to this segment including risks management, delays and outages in brokers' internet-based system, security and privacy of investors' accounts, etc.
The regulations, which have been framed in line with international best practices, will replace the Internet Trading Guidelines issued by the regulator earlier in year 2005. The earlier Guidelines did not adequately cater for the latest development in information technology globe witnessed over the period and needed to be replaced with the new regulations for effective enforcement and compliance by market intermediaries.
In order to efficiently counter the risks involved in internet trading, the new regulatory framework broadly caters to areas relating to registration and service requirements, information and infrastructural security measures, operational capacity, service availability and business continuity, periodic audit/assessment etc. Essentially, internet trading will take place through order routing systems, which will route client orders for execution of trades to trading system of the stock exchange based on regular order matching principles.
Under the regulatory framework, any member registered with the SECP as broker will be eligible to apply to the stock exchange for providing internet-based trading services subject to fulfilment of minimum conditions as prescribed.
The implementation of these regulations will not only benefits the investors in terms of efficiency and ease of trade execution with appropriate risk management but also contribute positively in expanding the existing limited market outreach.-PR
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