SECP Amends 'Murabaha Share Financing Regulations'

The Security and Exchange Commission (SECP) on Monday introduced amendments in 'Murabaha Share Financing Regulations' to promote Islamic finance products in the capital market

ISLAMABAD, (UrduPoint / Pakistan Point News - 12th Apr, 2021 ) :The Security and Exchange Commission (SECP) on Monday introduced amendments in 'Murabaha Share Financing Regulations' to promote Islamic finance products in the capital market.

Murabaha Share Finance (MSF) is a Shariah compliant leveraged product, a viable alternate avenue for the capital market investors who prefer Islamic mode of financing, said a press release issued by SECP here.

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 more ease and comfort.

Further, options for collateral management have been added to facilitate MSF Seller and market participants in executing Murabaha Share Financing and release of shares against payment of cash or other collateral.

The 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 Product and liquidity in the capital market.