ISLAMABAD - Keeping in view the practical difficulties reported by Modarabas, the Securities and Exchange Commission of Pakistan (SECP) has accepted the proposal of introducing a Short Form Ijarah (Lease) Agreement (SFIA) to be used in place of the model Ijarah (Lease) Agreement in the cases where more than one Ijarah transactions are involved with the same client.

Religious Board for Modarabas has approved the said document and the circular to this effect has been issued by the Registrar Modaraba, which is available on the SECP website.

Prior to approval of SFIA, Modarabas were obliged to execute a lengthy Ijarah agreement for the first and subsequent Ijarah transactions even with the same client, which was causing duplication of the processes and burdening the clients with providing same information/ documents already provided to Modarabas at the time of executing first Ijarah transaction.

The SECP expects that the approval of SFIA will facilitate the Modaraba sector in minimizing unnecessary and lengthy documentation and work as a cost and time saving tool for Modarabas while carrying out multiple Ijarah transactions with the same client.