PSX, bank offer Shariah-based trading platform for RDA clients

KARACHI: Pakistan Stock Exchange (PSX) and Meezan Bank Limited have signed an agreement to provide a dedicated Shariah-compliant trading platform for Roshan Digital Account (RDA) clients, a statement said on Wednesday.

The initiative would facilitate investors who are focused on investing in Shariah approved securities, it added.

PSX managing director and CEO Farrukh H. Khan and founding president and CEO of Meezan Bank Irfan Siddiqui signed the agreement in presence of PSX chairperson Shamshad Akhtar and senior management from both sides.

According to details, the trading platform will be available through an online trading system provided by PSX called KiTS or Karachi Internet Trading System. Any RDA client of an Islamic bank can avail the platform for investing in PSX through the services offered by more than 100 securities brokers using KiTS as an Order Management System (OMS).

The bank said the purpose of the platform was to enable non-resident Pakistanis to invest in the country’s capital market in a Shariah-compliant manner.

With the development in KiTS, shariah- compliant investing capability could be offered virtually by many TREC-Holders to their RDA customers. Hence, providing clients a broader suite of securities brokers to select from for their shariah-compliant investment needs, it stated.

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

Trading option is available only for Ready and Odd Lot markets. The recently bought shares can be sold on T+2 basis, i.e, when shares purchased are available in CDS account.

Speaking on the occasion, Farrukh Khan said the demand for shariah-compliant offerings was consistently rising and PSX had continued to grow its suite of Islamic capital market products, he added. “Pakistan Stock Exchange is at the forefront of using technology to enhance the experience of market participants including investors.”

He hoped that the initiative would generate interest and confidence among non-resident Pakistanis to invest in the capital market in a shariah-compliant manner. “I would specially like to appreciate Zahid Latif Khan (ZLK) Securities for being the first brokerage house to integrate and enable this offering for their RDA clients,” he added.

Irfan Siddiqui said brokers who were using KiTS would be on-boarded with Meezan Bank to further extend their services to RDA customers. He was of the view that the service would help tap into a wider RDA investor base that was seeking Shariah permissible investment options.

“Meezan Bank is leading the industry with the highest share in RDA accounts and investment in equity market,” Siddiqui said.

The bank’s advisory role in extension of the service aimed to improve transparency and compliance of the solution with Shariah principles, he stated. He said the bank was already offering a shariah-compliant trading platform for non-resident Pakistanis through 22 brokers, which are on-boarded through their own systems.