The Securities and Exchange Commission of Pakistan (SECP) has notified the Shariah Governance Regulations, 2023, revamping the regulatory framework by combining and repealing the earlier Shariah Governance Regulations, 2018 and the Shariah Advisors Regulations, 2017, according to a press release issued today.
The new regulations, issued under Section 512(1) read with Section 451 of the Companies Act, 2017, have introduced the concepts of voluntary Shariah supervisory boards and separate requirements for Shariah stock screening of listed securities.
In addition, jurisdiction of Section 451 of the Act to cover all securities has also been restored.
New regulations replaced the requirements of renewal of Shariah-compliant securities and qualification & experience requirements for Shariah advisors have been further strengthened.
In addition, powers and functions of Shariah advisors have been redefined by allowing them to offer services within all regulated sectors.
The format of the independent assurance report by the external Shariah auditor on the format agreed with by ICAP has also been added.
The regulations have been framed after comprehensive public consultation involving representatives from listed companies, brokers, asset management companies, mutual funds, and Shariah advisors.
The framework is expected to boost confidence in Islamic finance, attract investors, promote financial stability, and foster innovation.
It is also expected to drive growth in sectors aligned with Islamic principles; part of SECP's priorities.
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