Islamabad: The Securities and Exchange Commission of Pakistan (SECP) has proposed a comprehensive regulatory framework to regulate algorithmic trading in the country’s financial markets. The move has been taken to ensure market transparency, stability, and investor protection, keeping in mind global best practices.
The proposed framework has entrusted the stock exchanges with the responsibility of registering, monitoring, and testing algorithmic trading systems. In addition, brokerage firms have been directed to have strict internal controls, complete audit trails, and adhere to government regulations. Third-party providers will also be required to operate within the existing legal and regulatory framework.
The SECP has put out the proposal for consultation with stakeholders and has sought views by June 14, 2025. The consultation process aims to incorporate the views of all relevant parties before finalizing the framework.
Algorithmic trading in Pakistan is still in its infancy, and the SECP has proposed a phased approach for its implementation. In the first phase, only institutional investors will be allowed to engage in algorithmic trading, and retail investors may be included later after assessing the maturity of the market and risks.
This move is a significant step towards modernizing Pakistan’s financial markets and bringing them in line with global financial standards. Experts say that the implementation of this framework will improve market efficiency and increase investor confidence.
