KARACHI: The Pakistan Stock Exchange (PSX) will provide a dedicated Sharia-compliant trading platform for the clients of Roshan Digital Account (RDA), an online facility that lets overseas Pakistanis undertake banking, payment and investment activities in Pakistan.

Set up in collaboration with Meezan Bank Ltd, the trading platform will help expatriate Pakistani investors invest in Sharia-approved securities, the PSX said in a statement on Wednesday.

The platform will be available through the online trading system provided by the PSX called KiTS or Karachi Internet Trading System. Any RDA client of an Islamic bank can now use it for investing in the PSX through the services offered by more than 100 stockbrokers using KiTS as an Order Management System (OMS).

The purpose of this platform is to enable non-resident Pakistanis (NRPs) to securely invest in their homeland’s capital market in a Sharia-compliant manner. With this development in KiTS, the Sharia-compliant investing facility can be offered virtually by many brokers to their RDA customers. Hence, the PSX is providing RDA clients with a broader suite of securities brokers to select from for their Sharia-compliant investment needs.

The criteria for investing on the Sharia-compliant platform has been developed by Meezan Bank and vetted by the PSX’s Sharia adviser. The specifications of the Sharia-compliant trading platform include investing in Karachi Meezan Index (KMI)-All Share securities, Sharia-compliant initial public offerings (IPOs) and Sharia-compliant exchange-traded funds (ETFs).

The trading option is available for Ready and Odd Lot markets only. The recently bought shares can be sold on a T+2 basis — i.e. when shares purchased are available in the Central Depository System (CDS) account.

Speaking at the launch of the platform, PSX Managing Director Farrukh Khan said the demand for Sharia-compliant offerings is consistently rising while the PSX has continued to grow its suite of Islamic capital market products.

With the latest development in KiTS, all trading right entitlement certificate holders can now offer Sharia-compliant products to RDA clients, which will create new business opportunities for them, Mr Khan added.

Meezan Bank CEO Irfan Siddiqui said the bank is already offering a Sharia-compliant trading platform for NRPs through 22 brokers, which have been on-boarded through their own systems.

Published in Dawn, July 28th, 2022