Foundation Securities launches first Shariah-compliant trading platform in Asia Pacific

KARACHI: The first Shariah-compliant trading platform in the Asia Pacific has been launched by Foundation Securities, one of the many subsidiaries of the Fauji Foundation Group.

Foundation Securities, which is also part of a local affiliate of Macquarie Capital, has launched the maiden Islamic trading platform in Pakistan to cater to an untapped market that was reluctant to participate in the Pakistan Stock Exchange (PSX) due to the non-availability of pure Shariah-compliant trading facilities.

The guidelines being followed have been communicated by the Meezan Shariah Board in this regard.

“Many investors don’t invest in the market directly as they don’t understand technical issues like T+2 trading and the difference between the ready market and future market. They prefer Islamic funds like Al-Meezan investments and others”, notes Syed Ahmed Zaidi, CEO of Foundation Securities.

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“Using this platform, Shariah conscious investors do not have to worry about holding on to cash during downturns in the market. They can invest as per the Islamic rules while having the ability to withdraw at any time,” he added.

It may be noted here that while similar applications and services are available in North America, they are not backed by a large financial institution; this is a unique edge that Foundation Securities has.

Zaidi further says that he is confident about the demand for the trading platform. “Alhamdulillah, we are extremely excited at the launch of this unique trading platform that will gain massive popularity as many people avoid capital markets due to the non-availability of shariah-compliant platforms.”

The new platform is independent of the existing platform and available to all classes of investors.

DIFFERENT FROM CONVENTIONAL PLATFORMS

Features of the new Shariah-compliant trading platform include investment only in stocks in the KSE Meezan Index-All Share (KMI – All Share) index, 100 per cent cash basis (no leverage), only ready counter trade facility, no intra-day trading allowed, restriction on the sale of Letter of Rights, and investment in shariah-based Exchange Traded Fund Meezan Pakistan.

PSX-KMI All Share Index, developed by PSX and Meezan Bank, comprises of all shariah-compliant companies listed on the PSX Ltd. The index enlists 226 companies with 24 additions and 24 expulsions made in 2019.

No intraday trading means that investors can sell only after settlement in 2 days after the transaction, known at the PSX as t+2.

Foundation Securities (Pvt.) Limited is a full-service equities broking and investment banking firm with corporate membership of the PSX Ltd and the Pakistan Mercantile Exchange. 

The firm marks the entry of Fauji Foundation in the financial services sector. It has also signed a strategic cooperation agreement with Macquarie Capital Securities Ltd, an affiliate of global financial institution Macquarie Group, covering investment banking and securities operations.

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Ariba Shahid
Ariba Shahid
The author is a business journalist at Profit

14 COMMENTS

  1. Foundation Securities always set trends for Capital Market industry,

    As in our Capital market industry where we have less than 300k UIN’s and they have launched this type of Product “Shariah Edge” such a big achievement.

    • Foundation Securities always took the lead to introduce and new products. Its very good product for Individual clients and institutions which are interested to invest in Shariah Compliant segment. Well done Team FSL.

  2. I really appreciate Foundation Securities Ltd’s initiative for being the pioneer in providing shariah-compliant trading platform to it’s clients . Hats off to the Foundation team .

  3. That is good for me including others who want to trade in stocks with shariah rules.
    I always be confuse that there is nothing any platform who fulfills shariah regulations now i read that foundation has been launched this shariah trading system…….
    ALLAH BLESS THEM & give him success.
    Gr8 work foundation Team…….

  4. Foundation securities is the most popular ND leading brokerage house of the country because of its extensive research ND investor education tools amid at all levels of investing expertise….

  5. Stock market investments are unsafe where investors lose part of their principal amount. Furthermore, past performance is no measuring stick and Inflation is currently in double digits.

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