For most of Pakistan's Islamic finance history, 'Shariah-compliant' was a claim backed by an institution's own scholars and reputation. The SECP's Shariah Governance Regulations 2023 changed the terms: compliance became a certifiable regulatory status, Shariah advisors became registered professionals with SECP registration numbers, and the framework now underpins everything from mutual fund certification to Pakistan's first Islamic brokerage license. Industry commentary in the IFN Annual Guide called the regulations a breakthrough for a more transparent, compliant and investor-friendly ecosystem. Here is what the regime actually requires, and how to use it as an investor.
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What the 2023 regulations cover
The regulations establish a governance framework for Shariah-compliant companies and securities in SECP's jurisdiction: certification of companies as Shariah-compliant, registration of Shariah advisors, and the compliance and audit architecture around them. Their reach shows up in concrete places: Atlas's published fund methodology states it operates under the Shariah Governance Regulations 2023, restricting its universe to the KMI All Share Islamic Index with advisor sign-off on each security. And when the SECP amended its brokerage regulations in April 2024, the new Shariah-compliant brokerage category required certification under the same 2023 regulations, which is how ZLK Islamic became Pakistan's first fully Shariah-compliant brokerage house. The SECP has paired the regime with international alignment work, including an MoU with AAOIFI and hosting its first international Islamic capital markets conference.
For fund investors specifically, the regime formalizes three layers: a certified Shariah-compliant status for the product, a registered advisor accountable for the fiqh judgments, and an annual Shariah audit that tests whether practice matched policy. Each layer produces a document you can ask to see.
Registered advisors: names and numbers you can verify
The most investor-useful feature is advisor registration. Scholars certifying funds now carry SECP registration numbers, and the better AMCs print them: Al Meezan's Dr. Muhammad Imran Ashraf Usmani is SECP/IFD/SA/005; Atlas names Dr. Mufti Hassan Ashraf Usmani (SECP/IFD/SA/041) and Dr. Mufti Muhammad Wasie Fasih on the relevant fund pages of every monthly report; Faysal prints Mufti Abdul Basit's SECP/IFD/SA/192 on every page of its fund manager report. A registration number converts 'trust us' into 'look it up.'
Three governance models operate under the regime
In-house boards: Al Meezan (Justice (Retd.) Mufti Muhammad Taqi Usmani chairing, with Dr. Imran Ashraf Usmani and Sheikh Essam Ishaq) and Alhamra (Taqi Usmani again, with Dr. Muhammad Zubair Usmani and Dr. Ejaz Ahmed Samdani). Outsourced advisory firms: Al Hilal Shariah Advisors, whose supervisory council is headed by Mufti Irshad Ahmad Aijaz, certifies HBL, ABL, Alfalah and Mahaana, publishing quarterly market-wide screening (533 companies in March 2026) with the full thresholds and the purification formula. Single named advisors: Faysal Funds runs 35+ Islamic schemes on one scholar. All three satisfy the regulations; they differ in depth of review and concentration of judgment.
The screens and audits behind a certificate
Certification is not a vibe check. Equity funds apply published numeric screens (halal core business; interest-bearing debt below 37% of assets; non-compliant investments below 33%; non-compliant income below 5% of revenue with charity purification; illiquid assets of at least 25%; price above net liquid assets per share), advisors review portfolios continuously, and AMCs publish annual Shariah audit certificates. Documented scholar discretion exists and is disclosed in the better reports: Al Hilal's March 2026 screening report records a temporary exemption for TPL Properties after restructuring distorted a ratio, flagged for reassessment.
Where governance disclosure still falls short
Honesty requires the gap list. Our research found no Shariah advisor or board named on the public websites of several sizable Islamic fund operations: AWT Investments (an all-Islamic house with a Rs 63 billion flagship income fund), AL Habib Asset Management, JS Investments and NIT. The advisors exist in offering documents, but a saver on the website cannot name them. Other weak spots: several AMCs publish Shariah certificates only as scanned images, Faysal's 92-page fatwa compendium has no readable text layer, and the government's own CDNS Islamic window describes its Shariah board only as 'esteemed and renowned members' without names. Regulation created the framework; disclosure practice has not fully caught up.
How to use all this as an investor
Before investing in any Islamic fund, spend five minutes: find the named Shariah advisor and, ideally, an SECP registration number; locate the latest annual Shariah audit certificate; and check whether the methodology (screens and purification policy) is published rather than implied. A fund that clears all three is giving you verifiable governance. A fund that clears none is asking for trust it has not documented, whatever its billboards say. Provider-by-provider governance notes are on the HalalWallet investing hub.
Frequently asked questions
Do the 2023 regulations guarantee a fund is halal? They guarantee a process: registered advisors, certification and audit. The substantive fiqh judgments still rest with scholars, and reasonable scholars differ at the margins. What the regime gives you is accountability and paper trails, which is what regulation can give.
What is an SECP Shariah advisor registration number? A registration issued to scholars qualified to advise on Shariah-compliant securities, formatted like SECP/IFD/SA/005. AMCs that print it (Atlas, Faysal, Al Meezan) are making their governance checkable; ask for it where you do not see it.
Is one scholar enough to govern 35 funds? The regulations permit it, and Faysal operates this way with Mufti Abdul Basit. A multi-member board or an advisory firm with a supervisory council brings more review capacity and less key-person risk. Investors are entitled to weigh concentration of judgment as a factor.
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Why does the same scholar appear at multiple institutions? Pakistan's senior Shariah bench is small: Taqi Usmani chairs both Al Meezan's and Alhamra's boards, and Mufti Najeeb Khan advises both Al-Ameen and NBP Funds. Overlap brings consistency across the industry along with obvious independence questions; disclosure is what makes it acceptable.
Where do I find a fund's Shariah audit certificate? On the AMC's website, usually under Shariah compliance or downloads, published annually. If the latest certificate you can find is years old, or exists only as an unreadable scan, that is itself information worth acting on.