SECP allows five firms to offer Shariah-compliant trading

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has approved Islamic brokerage windows for five securities firms, allowing investors to trade Shariah-compliant shares, sukuk and exchange-traded funds (ETFs) through dedicated platforms.

The move comes as part of Pakistan’s broader push to expand Islamic finance, following a 2022 ruling by the Federal Shariat Court (FSC) directing the government to eliminate interest-based banking and financial systems by 2027, declaring interest, or riba, un-Islamic.

Pakistan’s Islamic finance sector has expanded significantly in recent years. Official data shows Islamic banking now accounts for around a quarter of the country’s total banking assets and deposits, while more than half of listed equities on the Pakistan Stock Exchange are considered Shariah-compliant.

In a statement, the SECP said the approved firms included Insight Securities (Private) Limited, Optimus Capital Management (Private) Limited, Value Stocks and Commodities (Private) Limited, Intermarket Securities Limited, and Dawsons Securities (Private) Limited.

“Through these Islamic brokerage windows, investors will be able to directly invest in Shariah-compliant stocks, sukuk, and Islamic ETFs,” the SECP said.

It added that funds deposited under Islamic brokerage accounts would be used exclusively for Shariah-compliant investments.

The regulator said the brokerage windows would operate through separate Islamic banking accounts and dedicated trading systems, with transactions restricted to Shariah-compliant securities.

In December last year, the SECP directed the Pakistan Stock Exchange to promote Shariah-compliant brokerage services as part of efforts to align capital markets with the FSC directive.

According to SECP data, more than 51 per cent of listed equities in Pakistan are Shariah-compliant, representing about 60 per cent of total market capitalisation and nearly 80 per cent of daily trading volume.

In 2024, the regulator also approved amendments to brokerage regulations and issued a licence to ZLK Islamic Financial Services, the country’s first fully Shariah-compliant brokerage house.