ISLAMABAD: In an endeavour to promote Islamic finance products in the capital market, the Securities and Exchange Commission of Pakistan (SECP) has introduced amendments in the Murabaha Share Financing regulations.

Murabaha Share Finance (MSF) is a Shariah-compliant leveraged product that is a viable alternate avenue for capital market investors who prefer the Islamic mode of financing. The product was initially launched in September 2019 with the guidance of renowned practicing Shariah scholars. However, through recent amendments, a system-based initiation and affirmation process has been introduced for Murabaha Sale Transaction. This will facilitate Islamic Financial Institutions (IFIs) and market participants to execute sale transactions with greater ease.

Additionally, options for collateral management have been added to facilitate MSF sellers and market participants in executing MSF and releasing of shares against payment of cash or other collaterals.

SECP has conducted a number of awareness sessions with banks, brokers, and investors to adopt Shariah-compliant leverage facilities in the capital market. It is hoped that the facilitation will result in increased activity in MSF products and liquidity in the capital market.


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