SECP issues concept paper to reinvigorate Waqf endowments

The Securities and Exchange Commission of Pakistan (SECP) has released a concept paper proposing the revival and modernization of Waqf (Islamic endowment) to align it with contemporary socio-economic needs and support sustainable Islamic social finance. 

Countries such as Malaysia, Turkiye, and Indonesia have successfully integrated Waqf into modern financial systems through robust regulatory frameworks, Shariah-compliant financial tools, and professionalized governance. However, Pakistan’s Waqf sector remains underdeveloped due to outdated practices and the absence of a comprehensive legal structure.

According to the SECP, the concept paper proposes strategies to harness waqf for Islamic social finance. These would include efforts to reinvigorate the waqf institution, enable the establishment of waqf in corporate structures as waqf companies, and develop Islamic instruments and financial services products for such companies. 

To address legal considerations, the SECP has suggested enabling the formation of Waqf companies under the Companies Act 2017 or revising provincial Waqf laws and NPO regulations to accommodate modern corporate structures. 

The SECP has also proposed awareness campaigns to mitigate and dispel fears of traditional Waqf institutions that may resist adopting a corporate structure.

The proposal has the potential to strengthen the impact, sustainability, and transparency of charitable initiatives nationwide by formalising governance and oversight. 

The proposal calls for the necessary legal amendments, regulatory frameworks, and stakeholder collaboration to bring this vision to fruition, paving the way for Waqf to serve as a dynamic vehicle for social development—ultimately benefiting education, healthcare, and poverty alleviation efforts across the country.