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Arab News
20-05-2025
- Business
- Arab News
Pakistan regulator unveils new measures to strengthen Shariah-compliant market intermediaries
KARACHI: The Securities and Exchange Commission of Pakistan (SECP) is proposing new measures aimed at strengthening the presence and operations of Shariah-compliant intermediaries within the capital market, the regulator said in a statement this week. Pakistan's Federal Shariat Court (FSC) directed the government in April 2022 to eliminate interest and align the country's entire banking system with Islamic principles by 2027. Following the order, the government and the State Bank have taken several measures ranging from changing laws to issuing sukuk bonds to replace interest-based treasury bills and investment bonds. However, documents seen by Arab News earlier this year showed Pakistan's government had failed to achieve a target set by the central bank to increase the share of Islamic banking deposits in the country by 50 percent by January this year. 'The paper proposes a phase-wise approach for Shariah-compliant institutional investors to route their business through Shariah-compliant brokers based on a plan to be prepared by their respective boards of directors,' the SECP said about the latest proposal. 'The paper encourages Islamic financial institutions, including providers of Islamic window services, to utilize Shariah-compliant intermediaries for takaful and investment purposes in situations where they are not obligated to do so.' Other proposed measures include creating a specific category for Shariah-compliant intermediaries for greater visibility on the Centralized Gateway Portal and a dedicated list of Shariah-compliant asset management companies on EMLAAK Financials, Pakistan's first digital mutual fund aggregator. The platform brings together multiple Asset Management Companies (AMCs) and their mutual funds under one roof. It is a venture of ITMinds Limited, a wholly owned subsidiary of the Central Depository Company of Pakistan (CDC). In order to facilitate Roshan Digital Account (RDA) clients, creating a separate category of Shariah-compliant intermediaries on the websites and mobile apps of Islamic banks would also be explored in coordination with relevant stakeholders, the SECP said.
Business Recorder
20-05-2025
- Business
- Business Recorder
Shariah-Compliant Intermediaries: SECP issues consultation paper
ISLAMABAD: In order to facilitate Roshan Digital Account (RDA) clients, the Securities and Exchange Commission of Pakistan (SECP) has proposed creation of a separate category of Shariah-compliant intermediaries on the websites/mobile apps of Islamic banks. In this regard, the SECP Monday issued a consultation paper proposing measures to promote Shariah-compliant intermediaries in the capital market. The paper is in line with the broader objective of SECP to facilitate the provision of Shariah-compliant services within its regulated sectors. The SECP has also proposed that Shariah-compliant institutional investors under regulatory domain of SECP (such as mutual funds, pension funds, private funds, Takaful operators, window Takaful operators, modarabas, Modaraba Management Companies, NBFCs, etc.) be required to route more of their business through Shariah-compliant brokers in a phased manner. This measure shall not only promote Shariah-compliant brokers but also provide the institutional investors access to greater expertise in Shariah-compliant investments. The paper proposes a phase-wise approach for Shariah-compliant institutional investors to route their business through Shariah-compliant brokers based on a plan to be prepared by their respective boards of directors. In addition, the paper encourages Islamic financial institutions, including providers of Islamic window services, to utilize Shariah-compliant intermediaries for takaful and investment purposes in situations where they are not obligated to do so. Other proposed measures include creating a specific category for Shariah-compliant intermediaries for greater visibility on the Centralized Gateway Portal and a dedicated list of Shariah-compliant asset management companies on EMLAAK Financials. Islamic financial institutions, including Islamic window operations, may be encouraged to utilize Shariah-compliant institutions and intermediaries excluding securities brokers, in instances where they are not obligated to do so. This may include using Takaful services for their insurance needs and Shariah-compliant AMCs for investment purposes, SECP proposals added. Copyright Business Recorder, 2025
