SECP Approves Independent Shariah Screening Firm

The Securities and Exchange Commission of Pakistan (SECP) has granted approval to Al‑Hilal Shariah Advisors (Pvt) Limited to independently conduct Shariah screening of securities, marking the first time an entity outside the Pakistan Stock Exchange and its existing partners has received such authorization.

According to the regulator, the approval enables the firm to evaluate and certify securities for Shariah compliance for both institutional clients and the wider public, thereby introducing an additional mechanism for Shariah screening within Pakistan’s capital market.

Under the framework established through the Shariah Governance Regulations, 2023, any organisation declaring securities as Shariah-compliant must apply a screening methodology approved by the SECP.

At present, Shariah screening for listed companies on the Pakistan Stock Exchange is conducted by the exchange in collaboration with Meezan Bank Limited and Al‑Meezan Investments. Out of 535 securities currently listed on the exchange, 308 are categorised as Shariah-compliant, accounting for a market capitalisation of approximately Rs12,373 billion — roughly 63 percent of the total market value of Rs19,679 billion as of December 31, 2025.

The SECP stated that the approval establishes a regulatory pathway for additional screening arrangements and is expected to facilitate the development of Islamic investment benchmarks in the domestic capital market.

Al‑Hilal Shariah Advisors (Pvt) Limited operates as an SECP-licensed Shariah advisory firm that provides governance, compliance and advisory services to financial institutions, capital market participants and corporate entities.

The screening methodology will rely on the most recent financial data available and will incorporate criteria governing the inclusion and exclusion of securities from the Shariah-compliant universe, along with mechanisms designed to ensure ongoing regulatory compliance.

The regulator further noted that the firm will coordinate with the Pakistan Stock Exchange prior to launching any Shariah-compliant index. In addition, the list of Shariah-compliant securities will now be updated on a quarterly basis instead of the previous six-month screening cycle.