SECP Seeks to Enhance Shariah Compliance in Pakistan’s Stock Market

Islamabad, The Securities and Exchange Commission of Pakistan (SECP) has proposed significant amendments to the Fourth Schedule of the Companies Act, 2017, aimed at improving disclosures for Shariah stock screening of listed companies.

According to Securities and Exchange Commission of Pakistan, the proposed changes are designed to align the regulatory framework with the evolving market needs and to ensure a fair trading environment. These amendments would require listed companies to disclose detailed information about their subsidiaries, which is critical for Shariah stock screening and for inclusion in Islamic indices on the Pakistan Stock Exchange.

The SECP’s initiative follows extensive consultations with stakeholders in the Islamic finance sector, reflecting a focused effort to enhance transparency and boost investor confidence. By simplifying the language and requirements of the Fourth Schedule, the SECP aims to facilitate informed decision-making among investors interested in Shariah-compliant stocks.

The Commission has released a consultation paper detailing the proposed amendments and is inviting feedback from the public and stakeholders. This move is part of the SECP’s broader strategy to support the growth of Islamic finance and to foster an inclusive financial system in Pakistan.