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 in Pakistan’s capital market. The approval marks an important development for the country’s Islamic finance sector, as it allows an additional entity to evaluate whether listed securities comply with Shariah principles.
According to an official statement, this is the first time an organization other than the Pakistan Stock Exchange (PSX) and its partners has been authorized to perform independent Shariah screening. The decision is expected to promote greater competition and expand the availability of Shariah-compliant investment services within Pakistan’s financial markets.
Under the Shariah Governance Regulations, 2023, any institution other than the issuer that publicly declares securities as Shariah-compliant must implement a Shariah screening methodology approved by SECP. With this approval, Al-Hilal Shariah Advisors can now apply its own screening framework to assess securities and determine their compliance with Islamic financial principles.
Currently, Shariah screening of listed securities at the Pakistan Stock Exchange is conducted in collaboration with Meezan Bank Limited and Al‑Meezan Investments. Out of the 535 securities listed on PSX, 308 are presently classified as Shariah-compliant, reflecting a significant portion of the market.
These Shariah-compliant companies represent a combined market capitalization of approximately Rs. 12,373 billion, which accounts for around 63 percent of the total market capitalization of Rs. 19,679 billion as of December 31, 2025. The figures also indicate a growing trend among listed companies to align with Shariah compliance standards.
Al-Hilal Shariah Advisors is an SECP-licensed advisory firm that provides Shariah governance, compliance, and advisory services to financial institutions, corporate entities, and capital market participants. The firm also offers investment advisory services in its role as a securities advisor. With the latest approval, it will be able to independently screen securities for Shariah compliance for both its clients and the broader public.
A key aspect of the approved screening process is the use of the most recent financial information when assessing securities. The methodology also introduces clear rules for the inclusion or removal of companies from the Shariah-compliant list, supported by a formal compliance mechanism to ensure adherence to regulatory requirements.
The SECP stated that the approved framework could also help facilitate the development of new Islamic market indices, providing additional benchmarks for investors interested in Shariah-compliant investments. However, the regulator has required the firm to coordinate with the Pakistan Stock Exchange before launching any Shariah-compliant index in the future.
In addition, the updated list of Shariah-compliant securities will now be released on a quarterly basis, replacing the earlier six-month screening cycle. This change is expected to provide investors with more timely updates regarding Shariah-compliant investment opportunities in Pakistan’s capital market.