The Securities and Exchange Commission of Pakistan has issued directives to expand Shariah-compliant intermediary services by requiring Shariah-compliant institutional investors under its oversight to route securities trading through Shariah-compliant securities brokers on a phased basis, aligning the approach with the constitutional mandate to gradually eliminate riba. The requirement applies to takaful operators, window takaful operators and other Shariah-compliant licensed entities including non-banking finance companies, collective investment schemes, voluntary pension schemes, modarabas and modaraba management companies, private funds and securities brokers. In phase one, entities must adopt an internal policy by December 31, 2025, submit quarterly progress and challenge reports starting March 31, 2026, and add at least one Shariah-compliant securities broker to their approved panel by June 30, 2026. In phase two, from July 1, 2026 to June 30, 2027, they must route at least 20 percent of securities trading through Shariah-compliant broker(s). SECP also encouraged Shariah-compliant licensed entities to use takaful for insurance and Shariah-compliant asset management services for investments. SECP advised the Pakistan Stock Exchange to develop a Shariah-compliant trading mechanism and increase market awareness, and required coordination with Trading Rights Entitlement Certificate holders to offer Shariah-compliant brokerage via outright conversion, subsidiaries or window operations. The Central Depository Company was directed to create a dedicated category for Shariah-compliant intermediaries on Asaan Connect, Emlaak Financials and Islamic banks’ digital apps, in coordination with the State Bank of Pakistan; after June 30, 2027 SECP will determine next steps based on entity-wise and sector-wise progress.

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