Shariah-Compliant Intermediaries: SECP issues consultation paper
ISLAMABAD: In order to facilitate Roshan Digital Account (RDA) clients, the Securities and Exchange Commission of Pakistan (SECP) has proposed creation of a separate category of Shariah-compliant intermediaries on the websites/mobile apps of Islamic banks.
In this regard, the SECP Monday issued a consultation paper proposing measures to promote Shariah-compliant intermediaries in the capital market. The paper is in line with the broader objective of SECP to facilitate the provision of Shariah-compliant services within its regulated sectors.
The SECP has also proposed that Shariah-compliant institutional investors under regulatory domain of SECP (such as mutual funds, pension funds, private funds, Takaful operators, window Takaful operators, modarabas, Modaraba Management Companies, NBFCs, etc.) be required to route more of their business through Shariah-compliant brokers in a phased manner. This measure shall not only promote Shariah-compliant brokers but also provide the institutional investors access to greater expertise in Shariah-compliant investments.
The paper proposes a phase-wise approach for Shariah-compliant institutional investors to route their business through Shariah-compliant brokers based on a plan to be prepared by their respective boards of directors. In addition, the paper encourages Islamic financial institutions, including providers of Islamic window services, to utilize Shariah-compliant intermediaries for takaful and investment purposes in situations where they are not obligated to do so.
Other proposed measures include creating a specific category for Shariah-compliant intermediaries for greater visibility on the Centralized Gateway Portal and a dedicated list of Shariah-compliant asset management companies on EMLAAK Financials.
Islamic financial institutions, including Islamic window operations, may be encouraged to utilize Shariah-compliant institutions and intermediaries excluding securities brokers, in instances where they are not obligated to do so. This may include using Takaful services for their insurance needs and Shariah-compliant AMCs for investment purposes, SECP proposals added.
Copyright Business Recorder, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
16 hours ago
- Business Recorder
Investment in SCRAs: 12-month holding period proposed for tax concession: FBR chief
ISLAMABAD: Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial Saturday said the FBR has proposed a holding period of 12 months for availing concessionary tax regime on investment made in Special Convertible Rupee Accounts (SCRA) under Finance Bill (2025-26). While review of Finance Bill (2025-26) on Saturday at the National Assembly Standing Committee on Finance, Chairman of the Finance Committee Naveed Qamar said that the condition of 'holding period' would discourage investment in the SCRA. The government should set 3-6 months holding period for making investment in the SCRA. The FBR chairman endorsed the viewpoint of Naveed Qamar. The FBR chairman said that we can propose six months holding period. The FBR has already discussed the proposal with the State Bank of Pakistan (SBP). In case of three months proposal, this should be subject to the approval of the Federal Cabinet. FBR directed to immediately stop sealing Tier-1 retail outlets MNA Mirza Ikhtiar Baig stated that the government must watch interest of the overseas Pakistanis making investment in the SCRA. Later, an official of the SBP joined the meeting online from Karachi. Muhammad Ali Malik, executive director SBP informed the committee that the proposed amendment has nothing to do with the Roshan Digital Account. The proposed change is related to the SCRA and not Roshan Digital Account. There should be some limitation of holding period for keeping investment in the SCRAs. We want to discourage short-term investments in the SCRAs. If they keep investment above one year period, the concessional tax regime should be applicable. To avoid volatility in market, the holding period should be one year for the purpose of making investment in the said accounts. The tax advantage should be given to those investors who would keep their investment for at least one year. According to the assessment of the SBP, there would be no immediate or significant impact on investment in case one year holding period is introduced, the SBP official added. The finance committee proposed six months holding period for availing concessionary tax regime on the SCRAs investments. Copyright Business Recorder, 2025
Business Recorder
2 days ago
- Business Recorder
KP approves funds for procurement of buses for BRT
PESHAWAR: The 34th meeting of the Khyber Pakhtunkhwa Cabinet was held here on Friday with Chief Minister Ali Amin Khan Gandapur in the chair. Cabinet members, Chief Secretary, Additional Chief Secretaries, Senior Member Board of Revenue, Administrative Secretaries and Advocate General Khyber Pakhtunkhwa attended the meeting. The cabinet approved the procurement of 50 additional identical diesel-hybrid buses for BRT Peshawar at an estimated cost of Rs. 3.2 billion. It is worth noting that TransPeshawar initially procured 220 buses, with 24 more added in 2022, bringing the fleet to 244. However, due to growing public demand and the expansion of operational routes from six to eight - including the recent addition of DR-11, DR-13, and DR-14 - the procurement of more buses has become essential. The cabinet approved the merger of ADP Scheme campuses of the Model Institute for State Children 'ZamungKor' located in Swat, D.I. Khan, Abbottabad, and the Girls Campus in Peshawar into the already functional autonomous body of the ZamungKor Model Institute for State Children, Peshawar. Currently, 600 children are enrolled at the Peshawar institute, while an additional 425 students are enrolled across the four ADP scheme campuses. The cabinet approved signing of agreement between Pak Qatar Asset Management as the 13th Asset Management Company under CP Fund Rules 2022. To address the issues of unsustainable pension expenses, the Government of Khyber Pakhtunkhwa initiated pension reforms in 2015, which included the transition from an unfunded pension system to a funded pension scheme. Consequently, Contributory Provident Fund was introduced. Under the new system, contributions from both employees and government are invested in the market through professional asset management companies registered with the Security and Exchange Commission of Pakistan (SECP). In January 2022, the Government of Khyber Pakhtunkhwa began entering into agreements with asset management companies having SECP voluntary pension scheme licenses under the Contributory Provident Fund Rules, 2022. Consequently, 12 companies entered into agreement with the government to manage the Pension Fund. The cabinet approved amendments in the Khyber Pakhtunkhwa Right to Public Services Act, 2014. The purpose of the amendment is to simply notifying Public Services, coordination between the Commission and Departments, clarification of the vague provision for e-governance, provision for public oversight and accountability of the Commission. Moreover, provision of reasonable accommodation has been added to achieve international benchmarks by providing statutory provision for facilitation of the marginalized segments of the society. The cabinet approved amendment to Sub Rule (07) Rule 11 of Khyber Pakhtunkhwa Public Private Partnership (selection of Private Partner) Rules, 2021. The rule pertains to the response time of bidders provides a time frame of sixty (60) days for a bidder to respond to a bid. As per the amendment the RFP shall be disseminated amongst the pre-qualified or shortlisted bidders, as the case may be, with a minimum response time to thirty (30) days. It constituted a committee to deliberate on Khyber Pakhtunkhwa Public Lands Utilization and Management Bill, 2025 and present recommendations to the cabinet. The cabinet approved the Khyber Pakhtunkhwa Non-Governmental Organization (working in the field of human rights) Rules, 2025. The cabinet approved a Non-ADP scheme with a total cost of Rs. 124.016 million for the current financial year for resumption of salaries of contract staff of Provincial Earthquake Reconstruction and Rehabilitation Agency (PERRA). The approval was also granted to issue termination notices to the contract staff of PERRA from 1st July 2025. Copyright Business Recorder, 2025
Express Tribune
2 days ago
- Express Tribune
SBP injects Rs14tr to bridge gaps
Listen to article The State Bank of Pakistan (SBP) conducted one of the highest Open Market Operations (OMOs) on June 20, 2025, injecting liquidity worth a substantial Rs14.3 trillion into the banking system to meet temporary and structural liquidity requirements. According to official data, the SBP accepted Rs13.93 trillion through a conventional reverse repo (injection) at a rate of return of 11.03% per annum across 36 quotes. Additionally, a Shariah-compliant Mudarabah-based OMO injection of Rs375 billion was executed at a return of 11.11% per annum with three accepted quotes. Sana Tawfiq, Head of Research at Arif Habib Limited termed this "among the highest single-day OMOs by the central bank," attributing the surge to both temporary and permanent factors. She noted that currency in circulation typically rises ahead of Eid, creating a temporary liquidity gap. On the structural side, debt repayments and a time lag between repayments and fresh inflows are elevating liquidity needs, she explained. She added that the government's fiscal deficit financing — constrained by International Monetary Fund (IMF) conditions that bar direct borrowing from the SBP — has further amplified OMO reliance, with banks channelling funds into government securities instead. Market experts expect the liquidity injections to remain elevated in the near term until inflows match outflows and post-Eid cash demand normalises. Furthermore, the Pakistani rupee extended the declining trend against the US dollar in the interbank market on Friday, slipping by 0.02%. By the close of trading, the local currency settled at 283.70 against the greenback, down by six paisas from the previous day's closing rate of 283.64. Globally, the US dollar was on track for its largest weekly gain in over a month, supported by safe-haven demand as investors remained cautious over escalating tensions in the Middle East and their potential impact on the global economy. Meanwhile, gold prices in Pakistan fell on Friday in line with the international market, which remained steady but on track for a weekly loss as investors awaited clarity on the Israel-Iran conflict after US President Donald Trump delayed a decision on possible involvement. According to data released by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of 24-karat gold per tola dropped by Rs1,595 to settle at Rs357,000. Similarly, the rate for 10 grams of gold declined by Rs1,368 to Rs306,069. Internationally, gold prices were steady on Friday and poised for a weekly loss after President Trump delayed a decision on entering the Israel-Iran conflict, according to Reuters. Spot gold was little changed at $3,369.63 an ounce, as of 1557 GMT. Adnan Agar, Director of Interactive Commodities said gold prices remained range-bound on Friday, with the metal trading between $3,340 and $3,375 in the international market, as investors awaited clarity on geopolitical developments in the Middle East. He told The Express Tribune that the market has been on a downward trend for the past five trading sessions, with a key support level identified at $3,320.
