The government has raised Rs2.25 trillion through 18 Ijarah Sukuk auctions since December 2023, with the Securities and Exchange Commission of Pakistan (SECP) playing a key role in the issuance and facilitation of the process.
The development follows the Ministry of Finance’s decision, approved by the federal government, to involve capital market institutions (CMIs) in the issuance, registration, trading, settlement, and transfer of Shariah-compliant government debt securities (GDS). Previously, these securities were issued and traded in the over-the-counter market.
SECP collaborated with the Debt Management Office (DMO), the State Bank of Pakistan (SBP), capital market institutions, banks, mutual funds, and brokers to implement the new framework. This required amendments to GDS rules by the federal cabinet, regulatory changes by CMIs, and the introduction of new systems and processes to support transparent and efficient debt trading.
Key reforms approved by SECP over the past few months include the rationalisation of brokerage commissions, a broker quotation-based revaluation mechanism, same-day settlement, and direct secondary market access for banks and mutual funds.Â
These measures aim to enhance transparency, widen the investor base, standardize trading and payment processes, and promote the use of technology for more efficient transactions.
SECP has reaffirmed its commitment to supporting the development of Pakistan’s domestic debt market. The regulator believes that improved transparency, increased competition, and standardization will strengthen investor confidence and market efficiency, ultimately contributing to the country’s economic growth.
