The SECP has notified for public consultation, seven more Shariah standards of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).
The freshly notified AAOIFI standards are Shariah Standard No 21, Financial Papers (Shares and Bonds), Shariah Standard No 27, Indices, Shariah Standard No 30, Monetisation (Tawarruq), Shariah Standard No 44, Obtaining and Deploying Liquidity, Shariah Standard No 45, Protection of Capital and Investments, Shariah Standard No 46, Al-Wakalah Bi Al-Istithmar (Investment Agency), and Shariah Standard No 53, Arboun (Earnest Money).
The SECP has been highly proactive in playing its role towards the Islamisation of the economy. It has endeavoured to replicate the best international practices in the Islamic financial services in Pakistan. In order to bring about the harmonisation and standardisation in the business practices of Islamic financial institutions, the SECP has been gradually adopting accounting and Shariah standards issued by the AAOIFI as a benchmark for Islamic financial services industry.
The SECP had earlier notified three Islamic financial accounting standards for adoption. This included IFAS 1 Murabaha, IFAS 2 Ijarah, and IFAS 3 Profit and Loss Sharing on Deposits in 2005, 2007 and 2013, respectively. While earlier, it had notified seven Shariah standards of AAOIFI, including Shariah Standard No 3, Default in Payment by a Debtor, Shariah Standard No 8, Murabahah to the Purchase Orderer, Shariah Standard No 9, Ijarah and Ijarah Muntahia Bittamleek; and Shariah Standard No 13, Mudarabah in January 2016.
Moreover, Shariah Standard No 17, Investment Sukuk, Shariah Standard No 18, Possession (Qabd) and Shariah Standard No 23, Agency and the Act of an un-commissioned agent (Fodooli) were notified in February 2018.
Keeping in view the significance of the standards in the Islamic financial services market of Pakistan, the SECP has fast-tracked adoption of more and more standards, the SECP’s Shariah Advisory Board on April 5, 2018, approved the adoption of aforementioned seven additional Shariah standards.
Consequently, the commission approved the publication of the draft shariah standards for public consultation. The public has been invited to provide their comments within 14 days.