ISLAMABAD: Pakistan’s top market regulator on Monday approved Islamic brokerage windows for five securities firms, allowing investors to trade Shariah-compliant shares, sukuk and Islamic exchange-traded funds through dedicated platforms.
The move is part of Pakistan’s broader push to expand Islamic finance after the Federal Shariat Court (FSC) directed the government in 2022 to eliminate interest-based banking and financial systems by 2027, ruling that interest, or riba, is prohibited under Islamic law.
Pakistan’s Islamic finance sector has expanded rapidly in recent years. According to official data, Islamic banking now accounts for roughly a quarter of the country’s banking assets and deposits, while more than half of listed equities on the Pakistan Stock Exchange considered Shariah-compliant.
The Securities and Exchange Commission of Pakistan (SECP) said the approved companies included Insight Securities (Private) Limited, Optimus Capital Management (Private) Limited, Value Stocks and Commodities (Private) Limited, Intermarket Securities Limited and Dawsons Securities (Private) Limited.
“Through these Islamic brokerage windows, investors will be able to directly invest in Shariah-compliant stocks, Sukuk, and Islamic ETFs,” the SECP said in a statement.
“Funds of investors opening accounts under Islamic brokerage windows will only be utilized for Shariah-compliant investments.”
The regulator said the Islamic brokerage windows would operate through separate Islamic bank accounts and dedicated trading systems, with trading restricted to Shariah-compliant companies.
In December last year, the SECP directed the Pakistan Stock Exchange to promote Shariah-compliant brokerage services in equity trading as part of efforts to align the country’s capital markets with the FSC ruling.
According to SECP data, more than 51 percent of Pakistan’s listed equities are Shariah-compliant, accounting for about 60 percent of total market capitalization and roughly 80 percent of daily trading volume on the stock exchange.
In 2024, the regulator also approved amendments to the Securities Brokers (Licensing and Operations) Regulations, 2016, and granted a license to ZLK Islamic Financial Services, Pakistan’s first fully Shariah-compliant brokerage house.
