Page 28 - CMA Journal (Mar-Apr 2025)

Exclusive Interview

The purpose of this steering committee is providing
strategic guidance regarding the implementation of the
judgement. The steering committee proposed a The Federal Government has
transformation plan for the conversion of conventional constituted a high-level steering
banking into Islamic banking and a governance structure
to smooth the transformation, including a dedicated committee under the patronage
committee for the capital market and the takaful industry.
of the Minister for Finance and
In order to assist the said steering committee and to
drive the Islamisation of the regulated sectors, SECP has Revenue. The purpose of this
created a multi-layered governance structure, including:
(1) a Shariah-Advisory Committee to provide guidance steering committee is providing
and advise the SECP on the Shariah-related matters; (2) strategic guidance regarding the
an Apex Islamic Finance Committee to guide
implementation of the FSC judgement; and (3) an Islamic implementation of the
Capital Market Development Committee (ICMDC) to
engage industry leaders and scholars for addressing judgement
practical issues and challenges.

The ICMDC comprises market professionals, including
nominees of ICMAP, working on a pro bono basis and screening process, reviewing the Shariah governance
serves as a think tank, providing valuable input and framework, developing a strategy for the adoption of
feedback on policy and developmental initiatives. The global standards on Islamic finance, proposing the
objective of the ICMDC is to promote, develop, and Islamic Financial Services Law, etc.
facilitate the growth of the Islamic capital market while
As an active think tank, I believe that the ICMDC will
ensuring alignment with Shariah principles while
continue to play its role in shaping the future of Islamic
fostering innovation, inclusivity, and sustainability in the
finance in Pakistan.
Islamic finance landscape.
ICMA: How does SECP ensure that innovation in
The terms of reference focus on promoting the
Islamic finance stays in line with Shariah principles
development and integration of Islamic finance by
while promoting market growth?
fostering dialogue and collaboration with key
stakeholders such as financial institutions, Shariah Tariq Naseem: Fostering innovation within the Islamic
scholars, and market experts. The mandate includes finance sector while ensuring strict adherence to Shariah
supporting the introduction of innovative principles is one of the key pillars of our strategy. One of
Shariah-compliant financial products and services, the key initiatives in this regard is the SECP’s Regulatory
enhancing market connectivity, and identifying and Sandbox, which provides a controlled environment for
addressing bottlenecks in the Islamic capital market. It financial institutions and fintech startups to test
also involves reviewing and recommending innovative Islamic finance products and services. Within
improvements to the regulatory and legal frameworks in this framework, participants can experiment with
alignment with Shariah principles and international Shariah-compliant solutions such as digital
standards, including implementing the Federal Shariat crowdfunding and peer-to-peer (P2P) financing under
Court's judgement. Additionally, the terms emphasise the close supervision of the SECP. This approach not only
the importance of research and development, adoption promotes innovation but also safeguards the integrity of
of global best practices, and the promotion of education, Islamic financial principles during the early stages of
awareness, and capacity building through collaborations product development.
with academic and international institutions. It is also
To provide further clarity and ensure consistency in the
helping us to identify potential bottlenecks and
market, the SECP has issued Guidelines for Offering
opportunities for the development of Islamic finance in
the capital market. Islamic Financial Services. These guidelines set out the
regulatory expectations for financial institutions looking
Since its inception, the ICMDC and its sub-groups have to offer Shariah-compliant services, including the
been playing an instrumental role in deliberating critical requirements for obtaining Shariah certification,
issues and proposing viable options, organising ensuring transparency, and maintaining robust Shariah
capacity-building and awareness activities, roundtables governance frameworks. This ensures that all new
and conferences. Especially, it also contributed offerings are in line with both domestic regulations and
significantly to resolving critical issues in the stock global Islamic finance standards.

26 ICMA’s Chartered Management Accountant, Mar-Apr 2025