
The Securities and Exchange Commission of Pakistan (SECP) has strengthened the regulatory framework for the mutual fund industry by outlining detailed requirements for “Investment Plans.”
This initiative builds on previous amendments to the Non-Banking Finance Companies and Notified Entities Regulations, 2008 (NBFC Regulations), aiming to enhance governance, streamline operations, and ensure safe investment opportunities, promoting retail participation in mutual funds.
Following extensive consultation with equity holders, including the Mutual Funds Association of Pakistan (MUFAP), the framework introduces categories for Collective Investment Schemes (CIS), such as Fund of Funds, Fixed Rate/Return, Capital Protected, and Exchange-Traded Funds. These categories aim to cover a wide range of investment options, ensuring diverse and accessible opportunities for investors.
Precise operational directives specify limits on several investment plans, their duration, and investment limitations while directing disclosures for Fund of Fund CIS and additional risk information. AMCs are required to issue separate investment plan reports within Fund Manager Reports (FMR) and adhere to offering guidelines, such as subscription timelines, NAV announcements, Total Expense Ratio, and other charges.
These measures aim to secure investors and promote an efficient environment in the mutual fund industry. SECP is committed to facilitating convenience and expanding access to innovative, regulated financial products.