SECP proposes options for Shariah-compliant brokerage services

WEB DESK: In a strategic move towards fostering Islamic capital markets, the Securities and Exchange Commission of Pakistan (SECP) unveiled a concept paper on Friday outlining a roadmap for the introduction of Shariah-compliant brokerage services in the securities market.

The paper proposes an optimal organisational and operational model to facilitate the seamless integration of such services.

The concept paper puts forth various options for the provision of Shariah-compliant brokerage services.

One approach involves the establishment of an Islamic brokerage subsidiary, holding the licence for either trading-only, online-only, or trading and self-clearing categories.

Alternatively, the paper suggests the creation of a dedicated Islamic window within existing brokerage structures, as highlighted in a press release.

Notably, the document includes a thorough critical analysis of the available options, coupled with a concise summary of international best practices in the realm of Shariah-compliant financial services.

This initiative builds upon the SECP’s guidelines from the previous year, wherein conventional financial institutions were encouraged to incorporate Shariah-compliant services.

Last year, the SECP issued a separate set of guidelines, enabling the general public to engage in Pakistan Stock Exchange (PSX) investments while adhering to Shariah principles.

The regulatory body remains steadfast in its commitment to cultivating Islamic capital markets, aiming for sustainable market growth, long-term economic investment, and enhanced financial inclusion, as emphasised in the press release.

The SECP is now seeking input from stakeholders, inviting them to provide feedback on the various options presented in the concept paper for the implementation of Shariah-compliant brokerage services.

This collaborative approach underscores the regulatory body’s dedication to inclusive decision-making and ensuring a robust framework for the future of Islamic finance in the securities market.

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