Islamabad: Chairman of the Securities and Exchange Commission of Pakistan (SECP), Akif Saeed, highlighted Pakistan’s potential to become a global leader in Shariah-compliant finance. Speaking at a press conference, he revealed that the compliance rate in Pakistani capital markets had reached 90%, in line with international standards.
The announcement came ahead of the 2nd International Islamic Capital Markets Conference, scheduled to be held in Karachi on December 12, 2024. The event is being organized in collaboration with the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Development Bank. Institute (IsDBI), with the participation of more than 20 international experts and policy makers.
According to Akif Saeed, the SEC has made great strides in regulatory harmonization. An internal review concluded that compliance with the International Organization of Securities Commissions (IOSCO) principles reached 90% in 2023, compared to 86% in independent assessments conducted in 2015 and 2018.
Tariq Naseem, Head of Islamic Finance at the Securities and Exchange Commission of Pakistan, added that the Commission now aims to assess the extent of compliance with the principles of the Islamic Financial Services Board (IFSB), a move that is expected to strengthen Pakistan’s position in Islamic finance.
Shariah compliant instruments have become the cornerstone of Pakistani capital markets. On the Pakistan Stock Exchange (PSX), 55% of the market capitalization is Shariah compliant. In addition, 48% of mutual fund assets, 65% of voluntary pension fund assets, and 95% of real estate investment trusts (REITs) adhere to Islamic principles.
This strong growth is complemented by an increase in Sukuk issuances. Since 2022, unlisted companies in Pakistan have raised PKR 500 billion through Sukuks, while the government has raised PKR 1.5 trillion through sovereign sukuks on the PSX exchange over the past year.
Efforts are also being made to strengthen the Sharia-compliant secondary bond market. The Securities and Exchange Commission of Pakistan is collaborating with the State Bank of Pakistan (SBP) and Pakistan Banks Association (PBA) to implement solutions aimed at increasing retail investor participation and ensuring transparency.
The Securities and Exchange Commission of Pakistan is working to guide Pakistan towards a full conversion to Islamic finance by 2028. Faisal Bank has already converted to a Sharia-compliant model, and other financial institutions and asset management companies are following suit.
The upcoming Islamic Capital Markets Conference will serve as a hub for global cooperation, with participants from Bahrain, Saudi Arabia, Malaysia, Turkey, Nigeria and the United Kingdom. This event underscores Pakistan’s commitment to developing Islamic finance on a global scale.