The Pakistan Stock Exchange (PSX) has invited stakeholders to submit feedback on its proposed Shariah Trading Regulations, aimed at introducing a dedicated platform for fully Shariah-compliant trading within the existing market framework. The initiative is designed to strengthen Pakistan’s Islamic capital market and align trading practices with constitutional and regulatory requirements concerning the elimination of riba (interest) from the financial system.
According to a public notice, PSX has proposed the creation of a segregated Shariah-compliant trading counter that would operate within the current exchange structure without altering the core trading engine. The segregation would be implemented by distinguishing Shariah-compliant brokerage operations from conventional businesses, introducing account-level designations, broker-level controls, and system-level validations to ensure compliance.
The proposal is in line with the Constitution of Pakistan, which mandates the elimination of riba, as well as the April 28, 2022 judgment of the Federal Shariat Court that set a five-year timeline for removing interest from the country’s financial system. Furthermore, the Securities and Exchange Commission of Pakistan (SECP), under its Strategic Action Plan for the Development of Islamic Finance in the Non-Bank Financial Sector, directed PSX to develop a consensus-based mechanism to facilitate Shariah-compliant trading.
PSX stated that the draft amendments were prepared following internal assessments by Capital Market Infrastructure Institutions, recommendations from its Shariah Focus Group comprising prominent scholars and practitioners, consultations with the Pakistan Stock Broker Association, and discussions with the SECP, while also taking into account international best practices at exchanges serving Shariah-focused investors.
The exchange has also proposed introducing a new chapter titled “Shariah-Compliant Securities Trading” in its regulations, outlining eligibility criteria for Shariah-compliant securities brokers, pre-trade validation requirements, and adherence to Shariah Governance Regulations and Guidelines. PSX has encouraged market participants, investors, and other stakeholders to review the proposed amendments and submit their feedback by March 2, 2026.