SECP creates dedicated Shariah-compliant brokerage segment at PSX

Mettis Global reported that the Securities and Exchange Commission of Pakistan has set up a dedicated Shariah-compliant brokerage segment within the capital market. 33 brokerage houses already run Islamic brokerage windows, which together make up about 52% of total trading volume at the PSX, while two dedicated brokers offer a full range of Shariah-compliant services.

Under the framework, Islamic brokers must keep client funds clearly separated and follow defined Shariah governance and compliance rules. Investors can reach Shariah-compliant equities, Sukuk and Islamic ETFs through these windows, with client money held in Islamic banking channels. Trading is confined to securities screened and approved as Shariah compliant, and interest-based financing along with non-compliant leveraged and speculative deals is prohibited.

The SECP introduced the changes through amendments to the Securities Brokers (Licensing and Operations) Regulations, 2016, allowing firms to offer Islamic services via windows, separate subsidiaries or full conversion. Brokers must also set up suitable Shariah oversight mechanisms while meeting PSX, CDC and NCCPL requirements. SECP Chairman Dr. Kabir Ahmed Sidhu described the step as a move toward a Riba-free economy and said transparent Shariah-compliant avenues could broaden market participation. Of the 535 securities listed on the PSX, 308 are classified as Shariah compliant, representing about 65% of total market capitalization.