The Securities and Exchange Commission of Pakistan (SECP) has directed its relevant licensed entities to adopt concrete measures for facilitating the growth of Shariah-compliant intermediary services.
The directive aligns with the constitutional mandate to eliminate riba from the financial sector gradually.
Shariah-compliant institutional investors under the SECP’s regulatory domain are now mandated to route their securities trading transactions through Shariah-compliant securities brokers in a phased manner, said a release issued here on Monday.
This requirement applies to takaful operators, window takaful operators, and other Shariah-compliant licensed entities, namely non-banking finance companies, collective investment schemes, voluntary pension schemes, modarabas, modaraba management companies, private funds, and securities brokers.
In the first phase, these institutional investors must formulate an internal policy by December 31, 2025.
They are required to report their progress, along with any implementation challenges, on a quarterly basis starting March 31, 2026, and must include at least one Shariah-compliant securities broker in their approved panel by June 30, 2026.
In the second phase, which runs from July 1, 2026, to June 30, 2027, these investors must route at least 20 percent of their securities trading business through Shariah-compliant securities broker(s).
Following the conclusion of the second phase, the Commission will determine the way forward based on the progress achieved, both entity-wise and sector-wise.
Furthermore, Shariah-compliant licensed entities have been strongly encouraged to switch to takaful for their insurance needs and to use Shariah-compliant asset management services for investment purposes.
The SECP has also advised the Pakistan Stock Exchange (PSX) to ensure the timely development of a Shariah-compliant trading mechanism and to enhance market awareness regarding Shariah-compliant brokerage services.
The Exchange is required to coordinate with Trading Rights Entitlement (TRE) Certificate Holders to offer Shariah-compliant brokerage services through outright conversion, the formation of a subsidiary, or the establishment of window operations.
In addition, the Central Depository Company has been directed to provide greater visibility to Shariah-compliant intermediaries by creating a dedicated category for them on Asaan Connect, Emlaak Financials, and the digital apps of Islamic banks, in coordination with the State Bank of Pakistan.
Industry Familiarisation
The Securities and Exchange Commission of Pakistan (SECP), in collaboration with the Asian Development Bank (ADB), organized an Industry Familiarization Session on the We-Finance Code in Karachi recently.
The event was attended by key stakeholders from the non-banking lending sector, insurance sector, and asset management industry, said a release issued here on Monday.
The session aimed to provide comprehensive insights into the We-Finance Code, a pioneering initiative designed to foster inclusive financial services, particularly for women.
The Code outlines a framework for financial institutions to offer gender-sensitive financial products and services that cater to the unique needs of women, promoting their financial inclusion in Pakistan.
Commissioner, Specialized Companies Division, Mr. Zeeshan Rehman Khattak, emphasized the growing importance of the We-Finance Code in the evolving financial landscape. “The We-Finance Code is not just a set of guidelines; it is a call to action for the financial sector to break down the barriers to women’s participation in the economy,” he said.
“By institutionalizing gender-sensitive financial services, we can empower women, drive economic growth, and address the financial exclusion that has been a persistent challenge in our society.”
The session provided participants with an in-depth understanding of the Code’s objectives, requirements, and its potential impact on both the financial sector and women’s economic empowerment. It also explored how the Code can be integrated with existing financial products and services to create a more inclusive financial ecosystem.
In addition to discussing the We-Finance Code, a panel discussion highlighted the potential for public-private partnerships in mainstreaming these services.
The panel focused on ensuring these services are accessible to women, particularly in the aftermath of recent floods that have disproportionately affected women and marginalized communities.
A senior representative from ADB stated that insurance and saving products could be blended with lending solutions to create an integrated approach, offering women both financial protection and access to credit.
The representative added that such initiatives not only benefit women but also contribute to the overall stability and growth of the financial system.
The SECP remains committed to supporting the development of inclusive financial products and services that meet the needs of all segments of society, particularly women, who remain underserved by traditional financial institutions.