ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has expanded the list of disclosures made in financial statements of listed companies for Shariah stock screening of shares.
The SECP on Tuesday proposed amendments to the Fourth Schedule of the Companies Act, 2017. These amendments enhance the list of disclosures made in financial statements of listed companies for Shariah stock screening of shares.
The SECP informed that the listed companies will be required to provide crucial information about their subsidiary companies for Shariah stock screening purposes in order to align the regulatory framework with market needs for a fair-trading environment. Additionally, the language of the Fourth Schedule has been simplified to bring clarity to the Shariah stock screening of shares to include in Islamic indices maintained by the Pakistan Stock Exchange.
The proposed revisions have resulted from SECP’s engagements with stakeholders during a series of Islamic finance sessions. The changes are aimed at enhancing transparency, fostering investor confidence and aiding in informed decision making.
It was highlighted during public consultation that the language of the Fourth Schedule is ambiguous and may not be applicable to listed companies that are not included in the Islamic index for Shariah or technical reasons at any given point in time. Apart from updating the list of disclosures, information on subsidiary companies of listed companies is vital for Shariah stock screening.
The SECP has published a consultation paper containing the objectives and details of the proposed amendments in comparative format and draft notification.
The SECP has invited feedback and comments from all stakeholders on the proposed changes to the Fourth Schedule. Interested persons are encouraged to share feedback through email at Islamic.finance@secp.gov by May 21, 2024.
Copyright Business Recorder, 2024