ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has proposed constitution of an oversight committee to review Shariah compliance of listed companies and securities.
The SECP issued draft amendments to Shariah Governance Regulations, 2018 through SRO 510(I)/2020 dated June 03, 2020.
An amendment has been proposed in regulation 12 to form the oversight committee.
According to the draft amendment:
An Oversight Committee to conduct Shariah screening process:
- There shall be an oversight committee comprising of the following members to oversee and establish the Shariah screening criteria.
(a) Chairman Shariah Advisory Committee, SECP – as head
(b) A representative of PSX;
(c) A representative of KMI;
(d) A representative of MUFAP.
- The oversight committee shall conduct the Shariah screening for listed companies on the basis of criteria notified by Pakistan Stock Exchange (PSX) as per regulation 11 for the purpose of a Shariah index.
- The Oversight committee shall review the Shariah compliance of companies and securities on a bi-annual basis.
- The oversight committee shall exclude a company or security from the index as and when it becomes Shariah non-compliant.
- To facilitate oversight committee and develop Islamic capital market products, PSX shall establish a dedicated Shariah department and appoint at least one independent Shariah Advisor.