SECP launches Shariah-compliant brokerage segment for stock market investors

The Securities and Exchange Commission of Pakistan (SECP) has established a Shariah-compliant brokerage segment to facilitate Islamic investment in the capital market.

In a statement released on Wednesday, the SECP informed that 33 brokerage houses have started services through dedicated Islamic windows. The commission said the Islamic brokerage windows will allow investors to directly invest in Shariah-compliant shares, Sukuk and Islamic exchange-traded funds (ETFs).

Funds of investors using the Islamic brokerage windows will be utilised through Islamic banking channels, while investment through these platforms will be restricted to Shariah-compliant securities only, the regulator said.

It added that Islamic brokers would not be permitted to offer interest-based financing or non-Shariah-compliant leverage financing to investors.

SECP raises Rs307bn through issuance of 72 Sukuk

According to the regulator, 308 of the 535 securities listed on the Pakistan Stock Exchange (PSX) are currently Shariah-compliant, accounting for around 65% of the exchange’s total market capitalisation.

SECP Chairman Dr Kabir Sidhu said the promotion of Shariah-compliant brokerage was an important step towards a riba-free economy.

“Providing investors with transparent and reliable Islamic investment opportunities is a priority,” he said, adding that the availability of Shariah-compliant investment options would help broaden participation in the capital market by attracting new investors.

The regulator said the initiative would provide investors with greater access to Islamic investment products.