The conference was organized by Al Huda Centre for Islamic Banking and Economic at a local hotel in Pakistan on Monday.
The speakers said that the Islamic financial system is growing rapidly in Pakistan with annual growth rate of 35 percent in last couple of years.
The share of Islamic financial system has increased to 8.5 percent of the total banking industry in Pakistan that would be increased to 15 percent by the year 2015.
The Securities and Exchange Commission of Pakistan (SECP) Commissioner, Asif Arif while speaking at inaugural session of the conference said it is the SECP's vision to promote the orderly development of a financially strong and transparent Islamic financial market, thereby increasing the outreach of Shariah compliant financial products in this pre-dominantly Islamic country.
"We see our role not only as a regulator but mainly as a facilitator and we have taken many important steps in order to translate our vision into reality", he said.
He recalled that the SECP had earlier proposed introduction of an Islamic Index at the stock exchanges for the purpose of promoting listing of Shariah-compliant companies on the Pakistani stock market and encouraging international and local players to list and trade their Shariah-based shares/ instruments on an Islamic index.
He said that the SECP in its 3-year strategic plan for the development of Pakistani capital market has envisaged consolidation of existing Islamic institutions and development of innovative Shariah compliant institutions, products and services in order to deepen the capital market and attract both national and international pool of resources.
"To enable fund raising from the market through issuance of these Shariah compliant financial instruments, necessary regulatory framework is being developed", he said and added this will assist in attracting investors towards Riba-free investment avenues and the development of Islamic capital market in Pakistan.
Currently, there are about 30 Islamic Mutual Funds in Pakistan, which make up roughly 13 percent of total mutual funds in the market.
Total assets under management of asset management companies managing Islamic funds in Pakistan are around Rs 50 billion as of February 2012.
He said the SECP is committed to promoting growth in Modaraba sector in the country.
"We are also reviewing and revising the regulatory framework for Modarabas in Pakistan so that more operational flexibility is available to market participants".
This mainly includes amendments in the Modaraba Ordinance and Rules, he added.
He said that the Prudential Regulations for Modarabas are also being reviewed to bring harmony between the regulatory framework for financial institutions under the NBFCs regime and Modarabas.
The State Bank of Pakistan and SECP have established a joint forum for the development of Islamic financial services in Pakistan.
Recently, guidelines to promote Musharakah and Modaraba financing by Islamic banking institutions prepared by the SBP were discussed and necessary input was provided to them.
He pointed out that the SECP is in final stages of issuance of new Takaful rules, which will allow the conventional insurance companies to have fully Shariah compliant window Takaful operations.
"We feel it will help the growth of Takaful at rapid pace", he said and added the concept of Central Shariah Board is also being introduced to provide a platform for resolving the Shariah compliant issues.
"We are also in the process of issuance standardised accounting regulations for general and family Takaful in consultation with Institute of Chartered Accountants of Pakistan based on the principles of Islamic Standards of Accounting and Reporting issued by Accounting and Auditing Organizations of Islamic Finance Institutions.
He said more Shariah scholars are needed who understand the requirements of modern financial system and have the capacity to develop solutions to meet the need of the Islamic financial institutions.
"We need to train our financial experts to provide them in depth knowledge of Shariah principles applicable to finance and economics", he said.
The organizer of this international conference and CEO, Al Huda-CIBE, Zubair Mughal while declaring the objectives behind this conference, highlighted the valuable contribution by Pakistanis in research, Shariah and skilled professionals bringing strong alternative in a difficult financial situation faced by the world.
He said that Islamic funds are rapidly gaining popularity in $1.3 trillion worth of global Islamic finance market gaining 6.1 percent share from over 650 funds spread all over the world, of which the highest 230 is in Saudi Arabia while Malaysia has 172, Cayman Island 59, Bahrain 46, Luxemburg 29, Dubai 16, Singapore 11 are the prominent players in the world.
He said that Islamic funds industry is growing with other aspects of Islamic finance including Mudarabah and Takaful businesses.
Some of these funds are the leading funds in Asian markets as well, which is a matter of honor for Pakistan and can be taken as the source of further development in this sector.
Saleem Ullah, Director of Islamic Banking Department State Bank of Pakistan, Shamshad Nabi CEO of Mutual Funds Association of Pakistan, Abbad Mirza Deputy General Manger (Operations) Karachi Stock Exchange, Irfan Siddiqui CEO of Meezan Bank Limited also spoke on this occasion and highlighted the growth, potential and future prospects of Islamic financial system in Pakistan.
A large number of well-known Shariah scholars and Islamic finance professionals and investors from UAE, USA, UK, Canada, Malaysia and Qatar participated in the conference.
The topics covered on first day of the conference were, investment opportunities for Islamic funds, Shariah status and mechanism of Islamic investments and funds with global trends, standardisation and brokerage and exchange rules and the Islamic exchange indices.
The next two days have been allocated for training workshops on the allied topics on Islamic investments, marketing and Shariah guidelines.
Source: Brecorder