Overview
- The Securities and Exchange Commission of Pakistan announced the new Shariah-compliant brokerage segment on Wednesday, allowing 33 brokerage houses to open Islamic windows and two firms to operate as fully dedicated Islamic brokers.
- Under rules amended from the 2016 broker regulations, Islamic windows must use Shariah governance, keep client funds segregated, and follow PSX, CDC and NCCPL procedures.
- Client money routed through the Islamic brokerage windows will be handled via Islamic banks, and trading will be limited to securities screened and approved as Shariah-compliant.
- Islamic brokers and windows are barred from offering interest-based financing or facilitating non-Shariah-compliant leveraged or speculative transactions.
- The move builds on a large Shariah base on the PSX — 308 of 535 listed securities are Shariah-compliant and make up about 65% of market capitalisation — and SECP says the segment already accounts for roughly 52% of trading volume, which could draw new retail and institutional investors to riba-free options.