Pakistan’s capital market has got a dedicated Shariah-compliant brokerage segment, marking a significant development in expanding Islamic investment options.
According to the Securities and Exchange Commission of Pakistan (SECP), 33 brokerage houses are currently operating dedicated Shariah-compliant windows, together accounting for approximately 52% of the total trading volume at the Pakistan Stock Exchange (PSX).
Two additional dedicated brokers are also providing a comprehensive range of Islamic brokerage services.
The new framework requires Islamic brokerage operations to maintain a clear separation of client funds and adhere to specific Shariah governance and compliance standards.
Under the arrangement, investors can access Shariah-compliant shares, Sukuk and Islamic Exchange Traded Funds (ETFs) through dedicated Islamic brokerage windows. Client funds will be handled through Islamic banking channels, while trading activities will be limited to securities approved as Shariah compliant.
Islamic brokers and dedicated windows will also be prohibited from providing interest-based financing or facilitating leveraged and speculative transactions that do not comply with Shariah principles.
The initiative is expected to broaden opportunities for investors seeking Riba-free investment avenues. Of the 535 securities currently listed on the PSX, 308 are classified as Shariah compliant, accounting for nearly 65% of the exchange’s total market capitalization.
The SECP said the figures highlight the substantial potential for Islamic investment in Pakistan. Dedicated brokerage services are expected to make such investments more accessible and encourage greater participation in the capital market.
The regulatory framework was introduced through amendments to the Securities Brokers (Licensing and Operations) Regulations, 2016. The amendments allow brokerage firms to provide Islamic financial services through dedicated windows, establish separate subsidiaries, or fully transition to Shariah-compliant operations.
The framework also mandates suitable Shariah oversight while requiring brokers to comply with relevant rules of the PSX, Central Depository Company (CDC) and National Clearing Company of Pakistan (NCCPL).
SECP Chairman Dr. Kabir Ahmed Sidhu described the development as an important step toward the government’s goal of establishing a Riba-free economy.
He said the initiative would provide investors with transparent and credible Shariah-compliant investment choices, help widen participation in the capital market and support the broader transition toward an Islamic financial system.
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