Pakistan’s Islamic finance landscape just received a major boost! The Securities and Exchange Commission of Pakistan (SECP) has approved important amendments to the Pakistan Stock Exchange (PSX) Regulations, all aimed at strengthening the Shariah-Compliant Segment and making the market more transparent, investor friendly, and reliable.
This move marks a significant step toward building a more inclusive capital market that meets the rising demand for Shariah-compliant financial products.
1. Transparency Takes Center Stage
One of the standout changes is SECP’s effort to make the market more transparent. PSX is now required to publicly disclose all disciplinary actions taken against listed companies directly on its website.
Why does this matter?
Because when investors can clearly see how companies behave and how the regulator responds they’re empowered to make smarter, more confident decisions. Transparency builds trust, and trust fuels investment.
2. Stronger, More Reliable Islamic Indices
Islamic finance investors often rely on indices like the KMI All Share Index to screen for Shariah-compliant companies. But the accuracy of these indices depends heavily on the quality of information received from listed firms.
To improve this, the new amendments require companies to submit Shariah-related financial disclosures such as income mix, loans, and investments directly to PSX.
This ensures better data integrity and makes Shariah screening more consistent, ultimately enhancing the reliability of Islamic indices in Pakistan.
3. Easier Access to Shariah-Compliant Accounts
SECP is also focused on making Islamic investing more accessible for everyday Pakistanis. The amendments introduce dedicated Shariah-compliant onboarding forms, including:
Customer Relationship Forms
Sahulat Account Opening Forms
These standardized forms simplify the process of opening Islamic trading accounts and help brokerage firms offer smooth, fully Shariah-compliant services.
4. Strengthening Local Index Management
In a push to enhance market credibility, PSX has been advised to develop and maintain Shariah indices such as the well-known KMI Indices either on its own or through an independent third party.
This must be completed within 12 months, giving PSX a clear timeline to ensure its index management practices align more closely with international standards.
A Step Toward a More Inclusive Capital Market
These amendments collectively highlight SECP’s strong commitment to building a capital market that is not only efficient and transparent but also supportive of Pakistan’s growing Islamic finance ecosystem.
Investors can look forward to clearer information, more reliable indices, easier access to Shariah-compliant products, and a regulatory environment that promotes sustainable growth.