PSX Launches Shariah-Compliant Trading Counter for Islamic Investors

The Pakistan Stock Exchange (PSX) has launched a dedicated Shariah-compliant trading counter to make Islamic investment opportunities more accessible to investors across Pakistan. The new facility allows eligible investors to trade approved shares and Islamic financial instruments under a framework designed to follow Islamic financial principles.

The launch took place on October 29, 2026, after the Securities and Exchange Commission of Pakistan (SECP) approved the Shariah Trading Counter Regulations. The initiative introduces additional controls for investors who want to participate in the stock market while avoiding securities and trading practices that do not meet the framework’s Shariah requirements.

According to the PSX, 39 brokerage firms have joined the initiative through their Islamic trading windows. Two additional brokerage houses are licensed to operate as fully Shariah-compliant brokers.

The exchange has also introduced a dedicated Shariah portal where investors can check which stocks and Sukuk are eligible for Islamic investment. The move is expected to broaden access to Pakistan’s Islamic capital market and encourage more people to explore stock market investments.

What Is the New PSX Shariah-Compliant Trading Counter?

The Shariah-compliant trading counter is a dedicated trading facility for investors seeking to trade eligible securities under Islamic financial principles.

Unlike a conventional trading arrangement, the new counter applies specific restrictions to the securities and trading methods available to participating investors. These controls are intended to help ensure that transactions follow the approved Shariah-compliant framework.

The initiative covers both retail and institutional investors. Retail investors can use it for personal investment, while institutions can access eligible securities through the applicable arrangements.

The launch follows regulatory approval by the SECP. This means the facility operates under an established regulatory framework rather than being an informal service introduced by individual brokers.

The PSX says the system includes controls designed to prevent prohibited transactions. Investors can also consult the exchange’s Shariah portal to identify eligible shares and Sukuk.

However, investors should still review the applicable account terms, fees, risks and eligibility requirements before opening an account. A Shariah-compliant trading facility does not remove the financial risks associated with investing in the stock market.

Which Securities Can Investors Trade?

The new PSX facility permits trading in securities and instruments that meet its Shariah-compliance requirements.

According to the exchange, the main eligible categories include Shariah-compliant equities, government Ijarah Sukuk and corporate Sukuk.

1. Shariah-Compliant Shares

Investors can buy and sell shares that meet the applicable Shariah eligibility criteria.

However, not every company listed on the Pakistan Stock Exchange automatically qualifies. Investors should check the official eligibility list before placing an order.

A company’s eligibility may depend on the applicable screening criteria and its financial and business activities. Investors should also check for updated information because eligibility classifications can change.

2. Government Ijarah Sukuk

Government Ijarah Sukuk are Islamic financial instruments structured around an Ijarah arrangement, which is commonly associated with leasing.

These instruments provide an additional investment option for people seeking exposure to Islamic finance beyond ordinary shares.

Their terms, expected returns and risks differ from those of equities. Investors should therefore understand the specific instrument before investing.

3. Corporate Sukuk

Corporate Sukuk are Islamic financial instruments issued by companies under structures designed to comply with relevant Islamic finance requirements.

They allow investors to consider eligible corporate financing instruments through the new trading facility.

As with other investments, corporate Sukuk carry risks that may include the financial condition of the issuer and the terms of the particular issue.

The PSX’s new framework brings these eligible categories into a dedicated trading environment with system-based restrictions.

Which Trading Activities Are Prohibited?

One of the most important features of the new PSX counter is its restriction on certain securities and trading practices.

The framework prohibits non-Shariah-compliant securities, short selling and derivatives trading through the counter. It also blocks interest-based leverage products, including the conventional Margin Trading System (MTS).

These restrictions distinguish the facility from trading arrangements that may permit a wider range of transactions.

The main restrictions and alternatives are summarised below.

Murabaha Share Financing is offered as an alternative to conventional interest-based share financing. However, investors should review the actual financing agreement, charges and applicable Shariah documentation before using the service.

These restrictions are important because they are supported by the counter’s operating procedures and system-level controls. The purpose is to limit prohibited transactions rather than rely only on investors to avoid them voluntarily.

PSX Introduces a Shariah Portal for Investors

Alongside the new trading counter, the PSX has introduced a dedicated Shariah portal on its Data Portal.

The portal lists stocks and Sukuk that qualify for trading under the relevant framework. It gives investors a central place to check eligibility before making investment decisions.

This can be particularly useful for beginners who may find it difficult to distinguish between eligible and non-eligible securities.

Instead of relying entirely on social media posts, informal lists or recommendations from other investors, users can consult the exchange’s information.

Nevertheless, investors should check the date of the information and confirm eligibility before placing an order. A security’s status should not be assumed to remain unchanged indefinitely.

The portal can help investors make more informed choices, but it does not guarantee investment returns or eliminate market risk.

How Can Investors Open a Shariah-Compliant Trading Account?

Investors interested in the new facility should contact a participating brokerage firm to confirm the account-opening process.

The PSX says investors can open regular trading accounts or Sahulat Accounts using a Shariah-compliant Customer Relationship and Risk Disclosure Document.

A Sahulat Account is a simplified account option subject to the applicable eligibility conditions and rules. Investors should ask their broker whether this account type is appropriate for their circumstances.

Before opening an account, investors should take the following steps:

1. Choose a participating broker. Confirm that the brokerage firm offers Shariah-compliant trading through an approved Islamic window or operates as a fully Shariah-compliant broker.
2. Check the account requirements. Ask which identity documents, forms and other information are required.
3. Read the risk disclosures. Understand the risks associated with share prices, Sukuk and any permitted financing arrangement.
4. Review all charges. Ask about brokerage commissions, account fees and other applicable costs.
5. Check security eligibility. Use the PSX Shariah portal to verify that the intended investment is eligible.
6. Understand the trading restrictions. Confirm which financing products and trading methods are available through the account.

Investors should not assume that every broker has already enabled the service. The exchange reported that 39 brokers had joined through Islamic windows, while two additional brokerage houses were licensed as fully Shariah-compliant brokers.

Availability and account-opening arrangements should therefore be confirmed directly with the selected brokerage firm.

PSX Has More Than 650,000 Investor Accounts

The launch comes as participation in Pakistan’s stock market continues to expand.

According to statements reported around the launch, the number of investor accounts at the PSX had crossed 650,000. The exchange’s leadership also highlighted the contribution of Millennials and Generation Z to new investor participation.

A dedicated Islamic trading facility could help attract people who have previously avoided conventional stock market arrangements because of concerns about Shariah compliance.

It may also encourage existing investors to review their portfolios and explore eligible securities through a dedicated framework.

However, the number of investor accounts should not be confused with the number of active traders or the total amount invested. Account growth alone does not establish how much additional investment the new counter will attract.

The facility’s long-term impact will depend on investor demand, the range of eligible securities, broker participation and the quality of the services offered.

Why Is Islamic Investing Important for Pakistan?

Islamic finance has become an important part of Pakistan’s financial development strategy.

The country has been working to expand Shariah-compliant financial services across banking, capital markets and government financing. A dedicated PSX trading counter adds another option for investors who want to participate in financial markets under Islamic principles.

The Federal Shariat Court ruled in 2022 that interest-based banking and financial systems should be eliminated in accordance with its judgment and the applicable legal process. The government has subsequently pursued measures to support the transition towards Islamic finance.

The new trading counter forms part of the wider effort to develop Pakistan’s Islamic capital market.

It could make eligible investments easier to access by combining approved securities, participating brokers and system-based trading restrictions in one framework.

Nevertheless, the transition involves more than launching a dedicated counter. It also requires effective regulation, suitable investment products, investor education and reliable information about Shariah eligibility.

What Are the Benefits for Investors?

The new PSX facility offers several potential benefits for people seeking Islamic investment opportunities.

Greater clarity: A dedicated counter and official eligibility portal can help investors identify securities that qualify under the framework.

More investment options: Eligible equities and Sukuk give investors different ways to participate in the capital market.

System-based controls: Restrictions on prohibited securities and trading methods can help reduce the risk of accidental non-compliant transactions.

Broader access: Participating brokers can make Islamic investment services available to more retail and institutional investors.

Improved investor confidence: A clearly defined framework may encourage people who were previously hesitant to consider stock market investments.

These benefits do not mean that every eligible investment will be profitable. Share prices can fall, companies can perform poorly, and Sukuk carry risks that depend on their structure and issuer.

Investors should consider their financial goals, time horizon and ability to withstand losses before committing money.

What Should Investors Check Before Investing?

Although the new counter is designed for Islamic investing, investors should not treat participation as a guarantee of financial safety.

First, verify the eligibility of each security through the PSX’s official Shariah portal. Do not rely solely on an old list or an informal recommendation.

Second, understand the investment itself. Shares and Sukuk have different characteristics, potential returns and risks.

Third, review the broker’s documentation. Ask about account terms, commissions, financing arrangements and the process for handling investments whose eligibility changes.

Finally, consider seeking advice from a qualified financial professional and an appropriate Shariah adviser if you need help assessing a particular investment.

The new counter provides a dedicated framework, but individual investment decisions still require research and care.

What Happens Next?

The PSX and SECP have identified further areas for developing Pakistan’s Islamic capital market.

These include expanding digital retail Sukuk, introducing Shariah-compliant tools for liquidity and risk management, and strengthening the legislative framework for Islamic financial services.

Progress in these areas could broaden the range of products available to investors and improve access to the capital market.

For now, the immediate priority is to make the new trading counter accessible through participating brokers and ensure that investors understand how to use it.

The Shariah portal will also be important because investors need reliable, updated information when selecting eligible securities.

Conclusion

The Pakistan Stock Exchange has launched a dedicated Shariah-compliant trading counter following approval of the relevant regulations by the SECP.

The facility allows investors to trade eligible shares and Sukuk while restricting non-compliant securities, short selling, derivatives and conventional interest-based leverage products. Murabaha Share Financing is offered as an alternative under the framework.

With 39 brokers participating through Islamic windows and two additional fully Shariah-compliant brokerage houses, the initiative provides a new route for retail and institutional investors seeking Islamic investment opportunities.

The new Shariah portal also gives investors a central place to check eligible stocks and Sukuk.

However, investors should still research their investments, review the terms and risks, and confirm eligibility before placing trades. The new facility can improve access to Islamic investing, but it does not guarantee profits or eliminate market risk.