Securities Commission of Pakistan approves first Islamic financial advisory company to conduct Shariah screening of securities

PAKISTAN: The Securities and Exchange Commission of Pakistan (SECP) has approved Islamic financial advisory firm, Al-Hilal Shariah Advisors, to independently conduct Shariah screening of securities.

According to the SECP, this marks the first entity other than the Pakistan Stock Exchange (PSX) and its partners to receive such approval.

The entity is an SECP-licensed Shariah adviser providing advisory in governance and compliance services to capital market participants, financial institutions and corporate entities. The company also offers investment advisory services in its capacity as a securities adviser.

“This approval will open the door for greater competition in Shariah compliant investment services,” SECP said in a statement viewed by IFN.

The approval will involve use of the latest available financial information for the screening process, establishing clearly defined rules for the inclusion and exclusion of securities from the Shariah compliant list, supported by a formal compliance mechanism to ensure adherence to regulatory developments.

The approval was granted with the condition that the participant will coordinate with PSX before creating any Shariah compliant index in the future.

“The updated list of Shariah compliant securities will be published on a quarterly basis, compared to the earlier six-month screening cycle,” SECP said.

The SECP said currently, listed securities are screened for Shariah compliance by the PSX in collaboration with Meezan Bank and Al-Meezan Investments. 308 securities are Shariah compliant out of 508 that are listed on the PSX. The Shariah securities represent PKR12.37 billion (US$4.43 million), accounting for approximately 63% of the total market capitalization of PKR19.67 billion (US$7.04 million) as of 31^st December 2025.

“The data reflects a growing trend among listed companies towards Shariah compliance in recent years” the SECP said.