ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has decided to constitute an Oversight Committee to conduct Shariah screening of listed companies and review the Shariah compliance of companies and securities.

The SECP has notified S.R.O. 510 (I)/2020 to issue draft amendments in the Shariah Governance Regulations, 2018 here on Wednesday.

The SECP has announced that an Oversight Committee would conduct Shariah screening process.

There shall be an oversight Committee comprising of the following members to oversee and establish the Shariah screening criteria:

Chairman Shariah Advisory Committee, SECP, Head; a representative of Pakistan Stock Exchange (PSX); a representative of KMI and a representative of Mutual Funds Association of Pakistan (MUFAP).

The Oversight Committee shall conduct the Shariah screening for listed companies on the basis of criteria notified by PSX as per regulation 11 for the purpose of a Shariah index.

The Oversight Committee shall review the Shariah compliance of companies and securities on a bi-annual basis.

The Oversight Committee shall exclude a company or security from the index as and when it becomes Shariah non-compliant.

To facilitate Oversight Committee and develop Islamic capital market products, PSX shall establish a dedicated Shariah department and appoint at least one independent Shariah Advisor.