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In order to foster the growth of Islamic mutual fund industry, the Securities and Exchange Commission of Pakistan (SECP) has revised the investment parameters for Shariah Compliant open end collective investment schemes. The Commission allowed the Islamic mutual funds to include the Government of Pakistan Ijarah Sukuk not exceeding 90 days remaining maturity in cash and near cash instruments requirement. Shariah Compliant open end collective investments schemes has not seen the issuance of short term Islamic Government papers like T-Bills, therefore, Government Ijarah Sukuk having remaining maturity of 90 days or less is the only viable and available avenue for investment in cash and near cash equivalent.

The Securities and Exchange Commission of Pakistan (SECP) is in the process of preparing shari'ah compliance regulations for the Islamic capital market. The SECP has chalked out a comprehensive plan for the development of the Islamic capital market in the country. Under the future plan, the SECP will introduce new products for Islamic capital market. The commission would also create awareness on the Islamic capital market. Besides, the SECP is planning to introduce shari'ah audit mechanism. The commission would also adopt new accounting standards on Islamic finance issued by Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). The SECP will launch webpage of Islamic finance department for education, promotion and development of Islamic finance.

Securities and Exchange Commission of Pakistan (SECP) has approved a four-member sharia advisory board to oversee Islamic financial products in the country, as the regulator looks to address credibility concerns. The board, which comprises three religious scholars and a technical member, would advise SECP on a range of issues including the operation, auditing and reporting of Islamic mutual funds, pensions and insurance operators. Besides, in February, the SECP published long-awaited rules for the issuance of sukuk as part of efforts to strengthen governance and broaden their appeal to investors. Oman's central bank set up a sharia supervisory board last October, with Bahrain and the United Arab Emirates also developing a similar country-level approach to the industry.

The Security and Exchange Commission of Pakistan (SECP) has asked the State Bank of Pakistan (SBP) to review the deal to merge KASB Bank and BankIslami, which cost millions of rupees to the equity investors. Sources said that SECP Chairman Zafar Hijazi wrote a letter to SBP Governor Ashraf Mehmood Wathra, urging him give compensation to equity traders who faced losses as a result of the amalgamation of BankIslami with KASB Bank. The value of KASB Bank’s shares became zero after the amalgamation process – as the shares now stand cancelled and retired – and there was no protection to investors’ money, mainly that of shareholders.

Securities and Exchange Commission of Pakistan (SECP) Chairman Zafar Hijazi said on Wednesday the regulator is looking to enhance Shariah compliance in the capital markets by restructuring and reorganising the Islamic capital market. Speaking at the fourth Islamic Finance Expo and Conference as chief guest, Hijazi discussed in detail the roadmap for the promotion of Islamic finance in Pakistan. He added that the SECP is centralising the Shariah-related capital market activities besides improving the regulatory framework for Takaful, Modarabas, Islamic mutual funds, Islamic pension funds and Islamic real estate investment trusts (REITs).

The Securities and Exchange Commission of Pakistan (SECP) has envisaged a roadmap for restructuring and reorganising the Islamic capital market. The initiative aims at the promotion of Shariah compliance in the capital market of Pakistan. The roadmap entails centralisation of the Shariah-related capital market activities, introduction of uniform Shariah Regulation for the takaful, modarabas, Islamic mutual funds, Islamic pension funds, Islamic REITs, other Islamic financial institutions (other than banking), Shariah compliant (Non-financial) Companies, Islamic products and instruments.

To regulate and develop the Islamic financial market, the Securities and Exchange Commission of Pakistan (SECP) has established an Islamic Finance Department. The new specialised department shall carry out the functions of Shariah regulation and compliance, product development, market awareness, Shariah securities market development and international liaison and networking. The Islamic Finance Department will act as a backbone for co-ordination between the SECP's operational departments with the primary objective of regulating and promoting Islamic finance and Shariah compliance in the capital market. Out of Pakistan's total Islamic financial assets of over Rs 1.7 trillion, around 40 percent assets are directly or indirectly regulated by the SECP.

Securities and Exchange Commission of Pakistan (SECP) Executive Director Nasim Shahid cancelled the licence of the asset management company Dawood Capital Management on March 22, 2013. He concluded in his order that Dawood Capital Management CEO Tara Uzra Dawood used privileged information and forged documents to avoid an imminent loss of Rs18.2 million. He also imposed a penalty of Rs20 million on her. The appellate bench of the SECP set aside the earlier order on January 22, saying the SECP executive director “did not have the power to pass the impugned order”. The bench also overturned parts of the 17-page original order that held Dawood guilty of having defrauded investors in the run-up to the write-down in the value of the mutual funds.

In order to develop a robust takaful sector, the Securities and Exchange Commission of Pakistan (SECP) has allowed M/s SPI Insurance Company Limited, formerly known as Saudi Pak Insurance Company Limited, to start window takaful operations. The initiative would help meet the risk mitigation needs of the masses and develop the Islamic financial sector, according to the SECP. Previously, two conventional insurance companies were allowed to transact takaful business through window operations. Currently, the SECP is processing one more application to start window takaful operations. The takaful sector in Pakistan has yet to go a long way in fulfilling the risk mitigation needs of the masses.

Pakistan’s insurance sector is set for a boost in competition after the industry regulator allowed conventional firms to offer takaful earlier this year. The regulator, the Securities and Exchange Commission of Pakistan (SECP), has now granted two takaful licenses and has up to 10 applications currently being finalised. 20 to 25 new takaful window operators are expected in the market within one year. The regulator sees greater opportunity in life insurance although commercial lines of business could also find appeal in rural markets where the demand for products like crop, agricultural, livestock insurance is increasing. Such an increase in activity could face challenges, in particular a lack of experienced staff as well as the need for Islamic re-insurance products to help manage excess risk.

After waging a legal battle with the regulator as well as conventional insurers for almost two years, Islamic insurance companies have finally agreed to an out-of-court settlement of the longstanding dispute over controversial Takaful Rules 2012. General and family Takaful companies will withdraw their constitutional petition against the SECP, 23 insurance companies and the federation of Pakistan within this week, thus allowing conventional insurers to run Shariah-compliant insurance business through parallel window operations. The SECP is said to have agreed to the Takaful players’ suggestion that conventional insurance companies should be required to maintain separate capital accounts for the two lines of business.

The Securities and Exchange Commission of Pakistan (SECP) has notified the Securities and Exchange Commission (micro-insurance) Rules, 2014, which will also regulate the micro-takaful business in the country. According to the rules, the word micro-insurance may be used interchangeably with the word micro-takaful; life micro-insurance with family micro-takaful; non-life micro-insurance with general micro-takaful; premium with contribution and insurer with operator. The commission has limited the sums insured under different concepts of micro-insurance. The SECP has also issued Code of Consumer Protection applicable on all insurers / operators in the business of micro-insurance / takaful. Moreover, the commission issued the Code of Conduct for Micro-insurance Agents applicable on all micro-insurance / takaful agents and their specified persons.

General and family Takaful companies are soon going to withdraw their constitutional petition against the Securities and Exchange Commission of Pakistan (SECP), 23 conventional insurance companies and the federation of Pakistan after a prolonged fight with the regulator to restrict competition in the Islamic insurance industry. Takaful operators are said to have struck a deal with their conventional insurance counterparts, which will allow the latter to run Shariah-compliant insurance business through parallel window operations. Some of the biggest players, including State Life, EFU Life, Jubilee Life and Adamjee Life are reported to be eager to launch their Islamic window operations. In fact, some of these companies have vowed publicly to launch window operations within three months of the lifting of the SHC’s restraining order.

It’s been almost 10 months since the Sindh High Court restrained the Securities and Exchange Commission of Pakistan (SECP) from implementing Takaful Rules 2012 that allowed conventional insurance companies to sell Takaful products through separate windows. The court has yet to give its final verdict on a petition of five Takaful operators in which they contended that the provision allowing conventional insurance companies to start selling Takaful products is against Shariah law. If the court clears Takaful Rules 2012, up to 20 conventional insurance companies (life and non-life) are likely to introduce Takaful windows. The paid-up capital requirement for a conventional life insurance company under existing rules is Rs500 million and Rs300 million for a conventional non-life insurance company. The paid-up capital requirements for general and family Takaful companies are not different from their conventional insurance counterparts.

The Securities and Exchange Commission of Pakistan (SECP) has passed orders against a takaful company for not complying with the provisions of the Insurance Ordinance, 2000 and the Companies Ordinance, 1984. Further, SECP’s insurance division has also passed an order against a life insurance company under section 130(2) of the Insurance Ordinance, 2000. The SECP has also issued 13 warning letters and four show-cause notices to various insurance and takaful companies for contravening various provisions of corporate laws, insurance laws and related accounting standards and regulations. To maintain transparency and provide equal opportunities to all insurance surveyors, Pakistan Insurance Institute has been mandated to examine and check the competency of surveyors, on the basis of which the SECP will issue a licence.