February 27, 2024 (MLN): The Pakistan Stock Exchange (PSX) has clarified that under the restriction of "Supplier Management Standards," securities brokers are prohibited from outsourcing critical functions to cloud service providers located outside of Pakistan.
To recall, the local bourse issued the "Minimum Information Security Standards for Securities Brokers" on June 27, 2023.
Under these standards, clause (m) of section 11 "Supplier Management Standards" of the said standards states that the core trading applications/services/operations and business processes used to process and store investor/trading data/information shall not be placed under cloud-based outsourcing arrangements.
To clarify confusion, PSX has stated that the above-mentioned restriction on cloud-based outsourcing arrangements specifically pertains only to Offshore Cloud Services.
However, for Onshore Cloud Services, PSX approval will still be required as per Clause (I) of section 11 "Supplier Management Standards" of the "Minimum Information Security Standards for Securities Brokers".
