The Security and Exchange Commission of Pakistan (SECP) regulates significant elements of the non-Islamic banking, financial services industry, Islamic capital market and corporate sector.
According to the SECP Annual Report, the Islamic Finance Department (IFD) is a key pillar of the SECP in ensuring Shariah compliance by coordinating and providing advice in areas including Shariah Compliant Companies, Sharia Compliant Securities, Modarabas, Takaful Operators and Window Takaful Operators, Non-Banking Islamic Financial Institutions, Islamic Mutual Funds and Pension Funds and Sharia Compliant Real Estate Investment Trusts.
Under Shariah Governance Regulations, 2018, so far SECP has issued Shariah Compliance Certificates to seven companies under Shariah Governance Regulations, 2018 for market development Islamic financial capital.
In addition, the SECP has issued Shariah compliance certificates for sukuk issues worth Rs 280 billion, including the Government of Pakistan’s “Power Energy Sukuk-II” worth Rs 200 billion. of rupees and the “Pakistan International Airlines Corporations Limited-Sukuk” worth 20 billion rupees, the report added.
Under the Shariah Counselors Regulations 2017, one new Shariah counselor was registered with the SECP during the year. It is pertinent to mention that to date, 105 Shariah advisors have been registered with the SECP, including six limited liability companies to provide Shariah advisory services.
The report states that within the framework of the strategic alliance for the promotion of Islamic finance, the SECP has successfully organized a series of webinars for the promotion and development of Islamic finance in collaboration with IBA-Center of Excellence in Islamic finance. So far, three webinars on Islamic Capital Market, Islamic Fintech and Islamic Regtech have been held. The SECP also provided a session on Islamic finance to students from the Department of Management Sciences at the University of Arid. The IFD plans to organize an international summit on Islamic finance in collaboration with the IFSB, AAOIFI and CEIFs in June.
The SECP has gradually adopted the accounting and Sharia standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) to achieve a high degree of standardization in the operational and business practices of Islamic financial institutions.
In this regard, the SECP has issued a draft notification for the adoption of seven (7) additional Shariah standards of AAOIFI, while the consideration of additional Shariah standards is under consideration for inclusion. in the project.
The SECP provides its regulatory support to stimulate the growth of the Islamic finance industry by strengthening the regulation of Islamic finance to provide an enabling regulatory environment for stakeholders under the jurisdiction of the SECP. In order to facilitate the conduct of business, amendments to the Shariah Governance Regulations 2018 are underway.
The SECP, in collaboration with all stakeholders, will continue to infuse Shariah principles into disruptive Fintech innovations (smart contracts, Big Data and Blockchain technology), which will contribute to financial inclusion and further improve the experience. client for Sharia-sensitive investors. The department will also review the RegTech solutions available for the supervision of the Islamic financial industry, particularly in the areas of Shariah compliance and Shariah auditing.
SECP plans to work with stakeholders to increase the volume of Takaful in Pakistan, launching Taktech (Takaful technology) to revolutionize the takaful sector, complementing existing initiatives to improve takaful coverage of unserved segments of the population.
The SECP will also explore the Asset Light Sukuk framework for issuing Asset Light Sukuks. For green sukuks, IDF is already conducting research to create a regulatory framework for issuing green sukuks in Pakistan.
In consultation with the Institute of Chartered Accountants of Pakistan (ICAP), the IFD is also in the process of introducing a Shariah audit qualification for external Shariah auditors, under the Governance Regulations of the Sharia, 2018. This step will help streamline the Sharia external audit profession in Pakistan. .—APP