TEHRAN – Iran’s capital market requires further development and investment, with greater focus on managing and fairly distributing risk alongside returns, the head of the Securities and Exchange Organization (SEO) said on Monday.

Hojjatollah Seyedi, head of the Securities and Exchange Organization, told a conference on Islamic finance titled “Artificial Intelligence and the Future of Islamic Finance” that Islamic financial instruments have become mainstream in Iran’s capital market and are increasingly common globally.

He said earlier perceptions of Islamic finance focused mainly on compliance and avoiding prohibited practices, but extensive theoretical work in Islamic economics and finance has shifted the paradigm toward flexibility, fairness and resilience.

Seyedi said Iran’s capital market has demonstrated resilience despite restrictions, uncertainties and complexities. Over the past week, he said, external negotiations, domestic developments, economic indicators, the budget, currency movements and inflation have all affected trading.

Despite several negative trading sessions, more than 70 percent of retail investors were buying shares on Monday and transactions were proceeding smoothly, he said, adding that the key issue is that trades are conducted in a fair and transparent environment despite prevailing uncertainties.

He described the asset-backed nature of Islamic capital markets as a core strength, saying it allows risks to be better structured and managed.

Seyedi also praised the SEO’s Sharia committee for what he called advanced approvals in recent years, attributing this to the dynamism of Shiite jurisprudence.

He said while risk is inherent to capital markets, Islamic finance principles have addressed risk management in depth and emphasized that risk should be distributed fairly among market participants.

EF/MA