PSX requires brokers to ensure connectivity with primary, DR sites

November 07, 2024 (MLN): The Pakistan Stock Exchange (PSX) has issued a notice informing all securities brokers to have adequate infrastructure, including system capabilities, to ensure connectivity with both the primary and Disaster Recovery (DR) sites of PSX for the smooth continuation of operations.

In the event of disruption at the primary site, the backup site of securities brokers must have adequate infrastructure and facilities to support ongoing operations.

Business Continuity Planning (BCP) encompasses comprehensive strategies and protocols designed to enable securities brokers to respond effectively in the event of disasters or threats and continue essential operations during and after a disruption.

By proactively addressing potential risks and devising contingency plans, a securities broker can mitigate the impact of unforeseen events on its day-to-day operations and safeguard its critical data and systems.

Therefore, a proactive approach must be adopted by implementing adequate BCP measures to reduce or avoid potential losses from disasters and achieve effective and rapid recovery.

To impart awareness and accentuate significance of BCP as part of disaster management, PSX conducted awareness sessions and DR drills for securities brokers pusrant to PSX Notices No. PSX/N-1 332, PSX/N­335, PSX/N-404 issued on December 29, 2023, April 17, 2024 and May 06, 2024 respectively.

In this regard, the attention of securities brokers is invited to the following relevant regulatory frameworks:

• Clause 4.27 of PSX Regulations (Chapter 4)
• Clause 8.3.2 of PSX Regulations (Chapter 8)
• Clause 9.9 of PSX Regulations (Chapter 9)
• PSX Minimum Information Security Standards for Securities Brokers notified vide Notice no.PSX/N-670
• Clause 10 of Securities Brokers (Licensing and Operations) Regulations 2016
• Clause 35 of SECP Guidelines for Internal Control System and Compliance Function for Securities Brokers The proactive adoption and integration of BCP and DR are critical for mitigating operational risks, ensuring continuity and reinforcing the overall resilience of securities brokers in the event of any threats and disruptions. By prioritizing these measures, securities brokers can further solidify their commitment to operational excellence and safeguarding the interests of their clients. Moreover, it enhances the overall trust and confidence of clients by demonstrating a firm commitment to maintaining the security and availability of their financial assets.

In light of the foregoing, it is in the best interests of the securities brokers that they strictly adhere to the BCP and DR requirements as stipulated in the aforementioned regulatory frameworks.

PSX shall conduct the DR drill within next six (6) months, therefore, the securities brokers must confirm their DR readiness for successful testing of BCP and DR arrangements during the DR drill.

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