Islamic financial regulations introduced by SECP

ISLAMABAD: To enhance the credibility of Islamic financial services sector, the Securities and Exchange Commission of Pakistan (SECP) introduced a draft of Sharia Advisors Regulations 2017.

According to SECP, Shariah Advisors Regulation 2017, framed under the Companies Act 2017, are expected to professionalize Shariah advisory services.

Companies would only be able to engage the advisors who would be on the SECP’s panel of Shariah advisors. To join this panel, advisors would need to meet fit and proper criteria and abide by a code of conduct that emphasizes independence and objectivity.

Some of these elements have shown impressive growth; for instance, the share of Shariah compliant assets of NBFI sector has grown from 12.3% in June 2010 to 34.6% as of June 2017.

The regulations have been drafted after an extensive consultation process with representatives of Shariah advisors, Islamic Financial Services Board Malaysia, State Bank of Pakistan, Pakistan Stock Exchange, Institute of Chartered Accountants of Pakistan, Takaful Operators, Modaraba and NBFI Association, Mutual Funds Association of Pakistan, and Shariah Board of SECP.

The draft of Shariah Advisors Regulations 2017 is available on the SECP’s website and is now open to public for consultation and stakeholders have two weeks to share their views.