Islamabad – The Securities and Exchange Commission of Pakistan (SECP) has issued a directive requiring its licensed entities to adopt concrete measures for promoting Shariah-compliant intermediary services, in line with the constitutional mandate to gradually eliminate riba from the financial sector.
Under the new framework, Shariah-compliant institutional investors regulated by SECP – including takaful operators, window takaful operators, non-banking finance companies, collective investment schemes, voluntary pension schemes, modarabas, private funds, and securities brokers – are now required to route their securities trading transactions through Shariah-compliant brokers in a phased manner.
In the first phase, these investors must formulate internal policies by December 31, 2025, and begin reporting their progress and implementation challenges on a quarterly basis starting March 31, 2026. By June 30, 2026, they must include at least one Shariah-compliant broker in their approved panel.
The second phase, running from July 1, 2026, to June 30, 2027, mandates that at least 20% of securities trading business be routed through Shariah-compliant brokers. The Commission will review progress at the conclusion of this phase to decide the way forward.
Additionally, SECP has strongly encouraged Shariah-compliant entities to opt for takaful instead of conventional insurance and to use Islamic asset management services for investments.
To support the initiative, the Pakistan Stock Exchange (PSX) has been directed to develop a Shariah-compliant trading mechanism, raise market awareness, and coordinate with TRE Certificate Holders to provide Islamic brokerage services through outright conversion, subsidiaries, or window operations.
Meanwhile, the Central Depository Company (CDC) has been instructed to enhance the visibility of Shariah-compliant intermediaries by creating a dedicated category for them on Asaan Connect, Emlaak Financials, and Islamic banks’ digital apps, in collaboration with the State Bank of Pakistan.
