Pakistan has introduced a Shariah compliant brokerage segment to allow investors to directly invest in Shariah compliant shares, Sukuk and Islamic ETFs through dedicated Islamic windows at brokerage houses.
The Securities and Exchange Commission of Pakistan said Islamic brokerage windows have started offering services at 33 brokerage houses, giving investors a dedicated channel for Shariah compliant investments in the stock market.
Under the new arrangement, investors will be able to invest directly in Shariah compliant securities through these Islamic brokerage windows. The investment services will be limited to securities that meet Shariah compliance requirements.
The SECP said investor funds held through Islamic brokerage windows will be handled through Islamic banking arrangements. Islamic brokers will also be prohibited from offering interest based financing and non Shariah compliant leveraged financing.
The regulator said 308 of the 535 securities listed on the Pakistan Stock Exchange are currently Shariah compliant. These securities account for around 65 percent of the total market capitalization of the exchange.
SECP Chairman Dr. Kabir Ahmed Sidhu said the expansion of Shariah compliant brokerage services was an important step toward developing a Riba free economy and providing investors with transparent and reliable Islamic investment opportunities.
The regulator said greater availability of Shariah compliant investment options could also encourage new investors to participate in Pakistan’s capital market.
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