Same day settlement in the Shariah-compliant securities

admin/ November 23, 2017

It has been proposed to convert T+2 settlement into T+0 settlement mechanism in the Shariah-compliant PSX stocks. The Shariah advisory board has granted in principle approval of the proposed Shariah-compliant trading counter at PSX subject to the proper translation of the mechanism of real-time/same day settlement in the regulations of the PSX. The SAB recommended that the relevant regulatory changes be made in the regulations of PSX, NCCPL, and CDC and presented for final approval of the SAB. The proposal shall help those who invest in the Shariah-compliant securities by reducing price risk associated with the T+2 settlement. Shariah principles require that shares cannot be sold until the delivery is tendered into the buyer’s account. In the proposed concept, this obstacle is addressed and the T+0 settlement mechanism is being introduced for Shariah-sensitive investors. The Shariah Advisory Board lauded the SECP’s initiatives for the development of the Islamic capital market and transformation from an interest-based to an interest-free economy.