On Nov. 19, PAK SEC revised Modarabas rules re Sharia governance.
PAK SEC published notification dated Nov. 14, 2024 in order to amend the consolidated circular on Modarabas, notification S.R.O. 2310 (I)/2022 dated Dec. 28, 2022.
Rename chapter 13 of the consolidated circular to Shariah governance for Modarabas.
Shariah governance regulations, 2023, shall apply to Modarabas and Modaraba firms.
It shall be the fiduciary responsibility of the board of directors of the Modaraba firm to ensure that all activities undertaken are in conformity with Sharia principles, rules.
In addition, the board of directors shall ensure that an adequate Sharia governance framework is implemented in letter and spirit, to ensure ongoing Shariah compliance.
The placement of a Sharia opinion (Fatwa) on the website of the Modaraba is obligatory only in cases where the products offered are innovative in nature and are not comparable or deemed similar to those already available in the financial market.
Every Modaraba and Modaraba company to extent of Modaraba under management shall ensure compliance with the Sharia compliance and audit requirements.
The Modaraba and the Modaraba companies may include additional requirements and control in their procedures for the more effective Sharia compliance and prudence.
Specifies additional requirements for Sharia compliance by Modaraba; omits clauses.
Effectiveness
The requirement for an external Sharia audit shall become effective and applicable for the period ending on or after Jun. 30, 2025.
Regulators
PAK SEC
Entity Types
Auditor; B/D; Corp; Exch; Fiduciary
Reference
PR 11/19/2024; Nt S.R.O.1861(I)2024, 11/14/2024; ESG;
