ISLAMABAD: In a move aimed at enhancing Shariah compliant investment opportunities within Pakistan’s capital markets, the Securities and Exchange Commission of Pakistan (SECP) has granted permission to five securities brokers to establish Islamic brokerage windows. This initiative will enable investors to engage in halal stock market investments, marking a significant development in the country’s financial sector.

According to Securities and Exchange Commission of Pakistan, the newly approved Islamic windows will facilitate separate trading operations, allowing brokers to invest clients’ funds exclusively in Shariah compliant shares, Sukuk, and Islamic Exchange Traded Funds (ETFs). The approvals came after rigorous evaluations of the brokers’ operational models, governance frameworks, and compliance arrangements.

The brokers will be required to maintain distinct systems and separate client and house bank accounts through Islamic banks, ensuring adherence to Shariah principles. Trading will be confined to Shariah compliant entities, including those listed on the PSX-KMI All Share Islamic Index, as well as Sukuk and Islamic ETFs.

The Islamic window model is part of a phased approach intended to allow conventional brokerage houses to gradually incorporate and expand Shariah compliant services. This model aligns with international best practices and is anticipated to bolster the long-term growth of Pakistan’s Islamic capital market.

The SECP has underscored its commitment to fostering an inclusive and ethical financial system, with ongoing reforms aimed at promoting Islamic finance as a cornerstone of a resilient financial ecosystem.