The Securities and Exchange Commission of Pakistan (SECP) has proposed major amendments to the Shariah Governance Regulations, 2023, aimed at streamlining the certification process and strengthening the role of Shariah advisors in approving Shariah-compliant companies.
According to a comparative statement issued by the SECP, the proposed changes would restrict commission-level certification approvals to regulated entities that are licensed, registered, or otherwise authorized by the regulator.
Under the proposed framework, companies seeking Shariah-compliant status would be required to appoint a Shariah board or Shariah advisor before submitting applications.
The SECP has also proposed shifting primary responsibility for Shariah review and approval to the company’s own Shariah board or advisor instead of the commission itself.
A new category and special provisions have also been introduced under the proposed amendments to facilitate companies that are not directly regulated persons. For unregulated companies, the proposed framework would allow certification by Shariah boards or advisors rather than direct certification by the SECP.
The regulator said the proposed amendments are intended to strengthen the integrity of Shariah compliance while ensuring accountability and adherence to regulatory standards, particularly in sectors where certification authority is delegated to Shariah advisors.
The SECP has further proposed removing the requirement for mandatory certification of a Shariah-compliant company that is already registered as a Shariah advisor.
Pakistan’s Islamic finance sector has expanded rapidly over the past decade, with regulators increasingly focusing on strengthening governance frameworks for Islamic banking, capital markets, takaful, and Shariah-compliant investment products.
