ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) Chairman, Akif Saeed, has highlighted Pakistan’s potential to become a global leader in Shariah-compliant financing. Speaking at a press conference, he revealed that compliance in Pakistan’s capital markets has reached 90%, aligning with international standards.
The announcement came ahead of the second international Islamic Capital Market conference, set to take place in Karachi on December 12, 2024. The event is being organized in collaboration with the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) and the Islamic Development Bank Institute (IsDBI), with participation from over 20 international experts and policymakers.
According to Akif Saeed, the SECP has made significant strides in regulatory alignment. An internal review found that compliance with the International Organisation of Securities Commissions (IOSCO) principles reached 90% in 2023, compared to 86% in independent assessments conducted in 2015 and 2018.
Tariq Naseem, SECP’s Head of Islamic Finance, added that the commission now aims to assess compliance with the Islamic Financial Services Board’s (IFSB) principles, a move expected to further bolster Pakistan’s standing in Islamic finance.
Shariah-compliant instruments have become a cornerstone of Pakistan’s capital markets. At the Pakistan Stock Exchange (PSX), 55% of market capitalization is Shariah-compliant. Additionally, 48% of mutual fund assets, 65% of voluntary pension fund assets, and 95% of real estate investment trusts (REITs) adhere to Islamic principles.
This robust growth is complemented by a surge in Sukuk issuance. Since 2022, unlisted firms in Pakistan have raised PKR 500 billion through Sukuk, while the government secured PKR 1.5 trillion via sovereign Sukuk at the PSX over the past year.
Efforts are also underway to enhance the Shariah-compliant secondary bond market. SECP is collaborating with the State Bank of Pakistan (SBP) and the Pakistan Banks’ Association (PBA) to implement solutions aimed at increasing retail investor participation and ensuring transparency.
The SECP is steering Pakistan toward a complete shift to Islamic financing by 2028. Faisal Bank has already transitioned to a Shariah-compliant model, and other financial institutions and asset management companies are following suit.
The upcoming Islamic Capital Market conference will serve as a hub for global collaboration, featuring participants from Bahrain, Saudi Arabia, Malaysia, Turkey, Nigeria, and the United Kingdom. The event underscores Pakistan’s commitment to advancing Islamic finance on a global scale.
