The Securities and Exchange Commission of Pakistan has established a dedicated Shariah-compliant brokerage segment within the country’s capital market, creating a formal framework for investors seeking Islamic investment services through the Pakistan Stock Exchange. According to the latest information, 33 brokerage houses are already providing Islamic brokerage windows, and these windows account for around 52% of the total trading volume at the Pakistan Stock Exchange. In addition, two dedicated brokers are currently offering a comprehensive range of Shariah-compliant brokerage services. The initiative is aimed at expanding access to Islamic investment products and creating a structured environment for investors seeking financial services that comply with Shariah principles.
Under the new framework, Islamic brokerage operations will be required to maintain a clear separation of client funds and comply with specific Shariah governance and compliance requirements. Investors will be able to access Shariah-compliant equities, Sukuk and Islamic Exchange Traded Funds through dedicated Islamic brokerage windows. Client funds will be maintained through Islamic banking channels, while trading activities will be restricted to securities that have been screened and approved as Shariah compliant. The framework also establishes boundaries around financing and trading practices, with Islamic brokers and dedicated brokerage windows prohibited from providing interest-based financing as well as non-Shariah-compliant leveraged and speculative transactions.
The Securities and Exchange Commission of Pakistan said the initiative is expected to widen investment opportunities for investors seeking Riba-free financial products and increase participation in the country’s capital market. The existing market already has a substantial pool of securities classified as Shariah compliant. At present, 308 of the 535 securities listed on the Pakistan Stock Exchange are classified as Shariah compliant, representing approximately 65% of the exchange’s total market capitalization. This existing share of Shariah-compliant securities provides a broad base for investors who want to participate in the stock market while following Islamic investment requirements.
The new brokerage framework has been introduced through amendments to the Securities Brokers (Licensing and Operations) Regulations, 2016. The amendments provide brokerage firms with several routes for offering Islamic brokerage services. Existing brokerage firms can establish dedicated Islamic windows within their operations, set up separate subsidiaries for Shariah-compliant brokerage activities or fully convert their businesses into Shariah-compliant brokerage operations. The regulatory structure is intended to allow different types of brokerage firms to participate in the Islamic capital market while maintaining defined governance, fund management and compliance requirements.
The creation of a dedicated Shariah-compliant brokerage segment comes as Islamic financial products continue to represent a significant part of Pakistan’s financial market. With 33 brokerage houses already operating Islamic windows and two dedicated brokers providing broader Shariah-compliant services, the framework formalises and expands an area that is already contributing substantially to trading activity at the Pakistan Stock Exchange. The reported 52% share of total trading volume through Islamic brokerage windows highlights the scale of demand for such services. By establishing specific rules for client funds, eligible securities, financing practices and Shariah governance, the Securities and Exchange Commission of Pakistan has created a defined regulatory structure for Islamic brokerage operations and provided investors with a dedicated channel for accessing Shariah-compliant equities, Sukuk and Islamic Exchange Traded Funds.
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