The Pakistan Stock Exchange (PSX) has launched a Shariah-compliant trading counter following approval of the Shariah Trading Counter Regulations by the Securities and Exchange Commission of Pakistan (SECP).
The initiative is designed to provide retail and institutional investors with an integrated platform for investing in accordance with Islamic principles.
The launch was marked by a gong ceremony attended by representatives of the SECP, State Bank of Pakistan (SBP), Central Depository Company (CDC), National Clearing Company of Pakistan (NCCPL) and Pakistan Stock Brokers Association (PSBA), alongside Shariah scholars and participating brokerage houses.
According to the PSX, 39 brokerage firms have been onboarded to offer Shariah-compliant trading through dedicated Islamic windows. Two other brokerage houses hold licences to operate exclusively as Shariah-compliant brokers.
The Counter is governed by operational procedures and regulations prescribed by the Exchange and approved by the Commission. Trading is limited to Shariah-compliant equities, Government Ijarah Sukuk and Corporate Sukuk, and non-compliant securities are prohibited.
Interest-based leverage products such as MTS are blocked, with Murabaha Share Financing (MSF) offered as the Shariah-compliant alternative.
Short selling and derivatives trading are also barred. Investors will, however, be able to sell non-compliant holdings to help bring their portfolios into line with Shariah requirements.
In addition, a new Shariah Portal on the PSX Data Portal lists every Shariah-eligible stock and Sukuk.
Investors, including those opening Sahulat Accounts, will be required to complete account documentation through a Shariah-compliant Customer Relationship and Risk Disclosure Document.
PSX managing director and chief executive Farrukh H. Sabzwari said the counter would improve access to Islamic investment opportunities through a dedicated trading environment supported by system-based compliance controls.
He said the number of investor accounts at the exchange had exceeded 650,000, with millennials and Generation Z accounting for a significant share of new participation.
The initiative, he added, was expected to attract further investment from Pakistan’s predominantly Muslim population.
SECP Commissioner Imtiaz Haider said the initiative could widen market participation and create opportunities for both investors and the brokerage industry. He noted that a significant proportion of listed equities and mutual fund assets were already Shariah-compliant.
Dr. Tariq Naseem, Head of Islamic Finance, SECP, outlined the next steps, including expanding digital retail Sukuk, introducing Shariah-compliant tools for liquidity and risk management. Lastly, strengthening the legislative framework for Islamic financial services.
