Islamabad, The Securities and Exchange Commission of Pakistan (SECP) has taken a significant step towards integrating Islamic finance into the country’s securities market by releasing a concept paper on Shariah-compliant brokerage services. This initiative aims to explore optimal organizational and operational models for providing Islamic brokerage services, thereby catering to the growing demand for Shariah-compliant financial products.
According to Securities and Exchange Commission of Pakistan, the concept paper outlines various options for establishing Shariah-compliant brokerage services. These options include setting up an Islamic brokerage subsidiary licensed for Trading-Only/Online-Only or Trading and Self-Clearing services, or establishing a dedicated Islamic window within existing brokerage houses. The paper also offers a critical analysis of these options and summarizes international best practices in the field.
This initiative follows the SECP’s previous efforts to enable conventional financial institutions to offer Shariah-compliant services, as well as guidelines issued last year to facilitate the general public’s investment in the Pakistan Stock Exchange (PSX) in accordance with Shariah principles. The SECP’s commitment to developing the Islamic capital market is aimed at supporting sustainable market growth, encouraging long-term economic investments, and enhancing financial inclusion.
Stakeholders are invited to provide their feedback on the proposed models for Islamic brokerage services. The concept paper is available for public consultation on the SECP’s official website.