Guidelines issued for offering IFS: SECP revamps Shariah governance framework

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has revamped the Shariah governance framework and also issued Guidelines for Offering Islamic Financial Services.

The three-day capacity building workshop jointly organised by SECP and IFSB on Islamic Capital Markets concludes in Islamabad.

The workshop, especially designed to enhance the capacity of officials of regulatory and supervisory authorities, was well attended by officials from the SECP, the State Bank of Pakistan, the Ministry of Finance, the Competition Commission of Pakistan, PSX, PMEX, CDC, and NCCPL.

Speaking at the event, Akif Saeed, Chairman SECP, reiterated its deep commitment to support the continued development and expansion of the Islamic finance industry in Pakistan.

Referring to the historic judgment of the Federal Shariat Court and government’s commitment to transform the entire financial system in accordance with Shariah principles, he pointed out that SECP has already accelerated its efforts and achieved considerable progress by enabling Islamic finance in all regulated sectors.

The SECP has revamped the Shariah governance framework and also issued Guidelines for Offering Islamic Financial Services that are enabling industry to achieve many firsts during the year.

These include Shariah certification of the first ever Shariah-compliant REIT schemes, dedicated asset management companies, Islamic income, money market, and equity funds, Islamic pension schemes, Islamic ETFs, an NBFC with buy-now pay-later platform, a stock brokerage house, and a microfinance company. The regular issuance and listing of GoP Ijarah Sukuk through the stock market is another major breakthrough in the domestic Sukuk market achieved during the year.

In addition, the corporate Sukuk market in Pakistan is also witnessing renewed interest; however, it is dominated by short-term, privately placed Sukuks, and during the year, the SECP approved 30 such Sukuks worth Rs 153 billion. (Total: 69 Sukuk, with a cumulative amount of Rs 563.640 billion as of June 30, 2023). He, however, emphasised that, there is a need to enable the listing of short-term Sukuk as well, so as to expand the investor universe for the issuer as well as the investable universe for the investor.

In his closing remarks and vote of thanks, Tariq Naseem, Head of Islamic Finance at SECP, expressed gratitude to IFSB and the esteemed trainers for their support in promoting Islamic finance.

He also shared that a comprehensive roadmap for capacity building in Islamic finance has been developed in partnership with IFSB Malaysia, AAOIFI Bahrain, and IsDBI Jeddah, the CIEF Alliance for Islamic Finance.

He also said that “Pakistan now stands ready to play its pivotal role in fostering an enabling environment for Islamic finance, one that encourages innovation, promotes investor confidence, and ensures the integrity and stability of our financial system.”

Copyright Business Recorder, 2024