The Securities and Exchange Commission of Pakistan (SECP) has proposed sweeping amendments to the Shariah Governance Regulations, 2023, aimed at simplifying certification procedures while reinforcing the authority and accountability of Shariah advisors overseeing Shariah-compliant companies.

According to a comparative statement released by the regulator, the revised framework would limit commission-level Shariah certification approvals to entities that are licensed, registered, or otherwise regulated by the SECP.

Under the proposed changes, companies seeking Shariah-compliant status would first be required to appoint a Shariah board or a qualified Shariah advisor before filing an application.

The amendments also shift the primary responsibility for Shariah review and approval from the regulator to each company’s own Shariah board or advisor, effectively decentralizing the certification process.

To accommodate businesses that do not fall directly under SECP regulation, the proposal introduces a separate category allowing unregulated companies to obtain certification through independent Shariah boards or advisors rather than seeking direct approval from the commission.

The SECP said the reforms are intended to enhance the credibility of Shariah compliance, improve governance standards, and ensure stronger accountability where certification authority is delegated to external advisors.

Another proposed change removes the requirement for mandatory certification of a company already registered as a Shariah advisor, reducing duplication in regulatory procedures.

Pakistan’s Islamic finance industry has grown steadily over the past decade, prompting regulators to strengthen governance structures across Islamic banking, capital markets, takaful operations, and Shariah-compliant investment products.

The proposed amendments form part of the SECP’s broader push to promote Islamic finance growth while improving regulatory clarity and operational efficiency for companies seeking Shariah-compliant recognition.