SECP Approves First Independent Shariah Screening Firm for Capital Market

The Securities and Exchange Commission of Pakistan has approved the first independent Shariah screening process for securities listed in the country’s capital market.

The approval has been granted to Al-Hilal Shariah Advisors Pvt Limited, allowing the company to independently conduct Shariah screening of securities for investors and market participants.

Previously, Shariah compliance screening for listed companies was carried out by the Pakistan Stock Exchange in collaboration with Meezan Bank Limited and Al Meezan Investments.

According to SECP, the approval creates a formal regulatory pathway for alternative Shariah screening arrangements under the Shariah Governance Regulations 2023, allowing greater competition in Shariah-compliant investment services.

Out of 535 listed securities on the Pakistan Stock Exchange, 308 are currently classified as Shariah-compliant. These companies account for a market capitalization of Rs. 12,373 billion, representing about 63 percent of the total market capitalization of Rs. 19,679 billion as of December 31, 2025.

Al-Hilal Shariah Advisors provides Shariah advisory, governance and compliance services to financial institutions, capital market participants and corporate entities. With the new approval, the firm will be able to screen securities for Shariah compliance and publish Shariah-compliant lists for investors.

The approved screening methodology will use the latest available financial information and introduce defined rules for the inclusion and exclusion of securities from the Shariah-compliant list.

The development is also expected to support the creation of new Islamic indices in Pakistan’s capital market. However, SECP said the firm will need to coordinate with the Pakistan Stock Exchange before launching any Shariah-compliant index.

The updated list of Shariah compliant securities will now be published every quarter instead of the previous six-month screening cycle.