The Securities and Exchange Commission of Pakistan (SECP) has taken a significant step toward bolstering Islamic finance in the country by releasing a consultation paper on May 19, 2025. The document outlines proposed measures aimed at increasing the visibility and effectiveness of Shariah-compliant intermediaries in the capital markets. This initiative is in line with SECP’s broader objective of fostering a more inclusive financial system that caters to the growing demand for Islamic financial services.
The consultation paper introduces a strategic, phased approach to encourage institutional investors engaged in Shariah-compliant activities to conduct their capital market transactions through Shariah-compliant brokerage firms. According to the SECP, this transition will be guided by structured plans formulated by the respective boards of directors of these institutions.
The proposals also suggest that Islamic financial institutions — including those operating through Islamic windows — should be encouraged to route their investment and takaful-related business through Shariah-compliant intermediaries. While such use is not mandatory in all cases, the SECP aims to strengthen the overall Islamic finance ecosystem by making this routing more appealing and accessible.
In order to enhance visibility and facilitate informed decision-making, the SECP recommends establishing a dedicated category for Shariah-compliant intermediaries on the Centralized Gateway Portal. This would help investors and institutions more easily identify compliant brokers and service providers. Furthermore, the SECP has proposed the development of a separate list of Shariah-compliant asset management companies on the EMLAAK Financials platform, offering an added layer of transparency for retail and institutional investors alike.
Recognizing the popularity and importance of the Roshan Digital Account (RDA) initiative among non-resident Pakistanis, the paper suggests creating a separate, clearly defined category for Shariah-compliant intermediaries on the websites and mobile applications of Islamic banks. This move, in coordination with key stakeholders, could further streamline the process for overseas Pakistanis seeking to invest in accordance with Islamic principles.
The SECP has invited feedback from the public, stakeholders, and industry participants on these proposals. Responses can be submitted via email to islamic.intermediaries@secp.gov.pk by June 3, 2025. The full consultation paper is available on the official SECP website.
This latest move by the SECP highlights its ongoing commitment to advancing financial inclusion through Islamic finance, a sector that continues to grow both locally and globally. By encouraging structured participation through Shariah-compliant intermediaries, the regulator aims to nurture a more robust and diversified financial landscape in Pakistan.
With this initiative, SECP not only addresses a rising market need but also sets a progressive tone for regulatory development, ensuring that Islamic financial products and services are both accessible and aligned with global best practices.