In order to enhance the credibility of Islamic financial services sector, the Securities and Exchange Commission of Pakistan (SECP) has approved the Shariah Advisors Regulations, 2017. Framed under the Companies Act, 2017, these regulations will discipline and professionalize Shariah advisory in Pakistan. Companies and entities will only engage the Shariah advisors registered with the SECP.
To register, Shariah advisors will need to meet proper criteria and abide by a code of professional behavior that emphasizes objectivity, integrity, and independence of a professional Shariah advisor.
The regulations have been formulated after an extensive consultation process with representatives of Shariah advisors, Islamic Financial Services Board (IFSB) Malaysia, State Bank of Pakistan (SBP), Pakistan Stock Exchange (PSX), Institute of Chartered Accountants of Pakistan (ICAP), takaful operators, modaraba and NBFI Association, Mutual Funds Association of Pakistan, and Shariah Board of the SECP.
It should be noted that the SECP regulates various important elements of Islamic financial services industry. These elements include Islamic mutual and pension funds, modarabas and NBFIs, takaful operators, Shariah-compliant companies, Shariah-compliant securities, Shariah-compliant real estate investment trusts, and Shariah-compliant indices.
Some of these elements have shown impressive growth. For instance, the share of Shariah-compliant assets of NBFI sector has grown from 12.3% in June 2010 to 34.6% as of June 2017.