Islamabad, 30 May 2025: SECP Targets Algorithmic as Pakistan’s financial watchdog unveils a regulatory roadmap aimed at managing the growing influence of automated trading systems.
The Securities and Exchange Commission of Pakistan (SECP) has released a Concept Paper titled “Regulating Algorithmic Trading in Pakistan”, outlining a phased strategy based on global best practices.
A Balanced Strategy for Innovation and Oversight
The SECP’s newly proposed framework strives to strike a balance between technological advancement and the need for robust market regulation.
According to an official statement issued on Friday, the initiative is designed to promote innovation while ensuring market transparency and protecting investors from potential risks.
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SECP Targets Algorithmic through a set of guidelines that assign clear responsibilities to market participants. Under the proposed structure, stock exchanges will be responsible for registering algorithmic traders, testing their systems, and issuing distinct identifiers.
Brokerage firms will be required to enforce strict internal controls, maintain detailed audit trails, and ensure full compliance with governance standards. Additionally, third-party algorithm providers must operate under the prevailing legal and regulatory frameworks.
Phased Introduction and Public Consultation
Recognising that algorithmic trading is still in its early stages within Pakistan, the SECP has recommended a gradual rollout.
In the initial phase, only institutional investors will be permitted to use algorithmic strategies. A broader inclusion of retail investors may follow, depending on risk evaluations and market maturity.
The SECP has made the Concept Paper available on its official website, inviting comments and suggestions from stakeholders. This consultative process is expected to refine the policy framework before final implementation.
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SECP Targets Algorithmic systems not only to enhance efficiency but also to prevent the misuse of technology in financial markets.
As Pakistan moves closer to aligning with global financial standards, this development marks a significant step in modernising its capital market infrastructure.
