Securities and Exchange Commission of Pakistan announces establishment of Shariah Advisory Board

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Islamabad, May 08, 2013 (PPI-OT): Considering the need for Islamic Financial Institutions (IFIs) and Islamic Capital markets (ICMs) to innovate and operate within the purview of Shariah principles and to ensure that aforesaid organizations’ business dealings are in line with Islamic principles, the Securities and Exchange Commission of Pakistan (“the Commission”) deemed it necessary to have a central advisory body to guide their transactions in accordance with the principles of Shariah.

Accordingly, the Commission has given its formal assent on the formation of Shariah Advisory Board (the SAB of SECP) pursuant to Section 9 of the Securities and Exchange Commission of Pakistan Act 1997 (XLII of 1997).

The (9) members of, “the SAB of the SECP” shall include prominent Shariah Ulemas, a jurist, an accountant and representatives of the Commission. Each member of the SAB shall be a qualified individual with in-depth knowledge and experience of Islamic accounting, finance, economics and Shariah law.

Apart from acting as a reference body and advisor to the Securities and Exchange Commission of Pakistan (SECP) on Shariah matters, “the SAB of the SECP” shall be entrusted with the ascertainment of Islamic law for the purpose of development and promotion of Islamic Financial Institutions (IFI) which includes Islamic Mutual Funds, Islamic Pension Funds, Takaful Operators and other financial institutions which are based on Shariah principles and are supervised and regulated by the SECP.

Some of the key functions to be performed by SAB of the SECP are to validate the products of IFIs and to ensure their compatibility with the Shariah principles; recommend guidelines on the criteria for investment by Islamic Capital Institutions; advise on reporting and auditing standards; undertake educational activities for understanding of Shariah principles; and the introduction and implementation of new models and products based on international research.

It is envisaged that the SAB shall play a crucial role in bringing an effective and efficient Shariah Governance System, thereby enhancing the credibility of IFIs and ICMs which will ultimately contribute to the achievement of the SECP’s fundamental objective i.e. protection of the investors/policyholders’ interests. The SAB of SECP shall also endeavor to foster the growth and development of Islamic Financial Market and provide guidelines for devising new products and services.

Tickers:

1. SECP announces the establishment of Shariah Advisory Board.

2. Shariah Advisory Board shall be entrusted with the ascertainment of Islamic law for the purpose of development and promotion of Islamic Financial Institutions

3. Shariah Advisory Board will validate the products of IFIs and to ensure their compatibility with the Shariah principles

4. Shariah Advisory Board shall play a crucial role in bringing an effective and efficient Shariah Governance System

For more information, contact:
Shakil Ahmad Chaudhary
Head, Internal and External Communication
Securities and Exchange Commission of Pakistan (SECP)
NIC Building, 63 Jinnah Avenue, Islamabad
Tel: +9251 921 4005 or 921 4009 (Ext. 378)
Fax: +9251 920 6459
Cell: +92302 855 2254
E-mail: shakil.chaudhary@secp.gov.pk