The Securities and Exchange Commission of Pakistan (SECP) on Monday approved simplified certification and regulatory requirements for distributors selling mutual funds unit for single asset management company (AMC).
The decision was taken to encourage establishing a vibrant distribution network, said a statement issued by the commission.
A new class of mutual funds distributors comprising of qualified and experienced individuals has been introduced who can distribute the mutual funds’ units of a single AMC only by complying with minimum qualifications and new certification from the Institute of Financial Market of Pakistan (IFMP).
The distributors selling mutual funds units of single AMC shall be exempted from seeking license or registration from the SECP and existing IFMP certification shall not be applicable to them.
The minimum eligibility criteria for these distributors have been kept simple to encourage individuals to join this profession in line with distributors of other financial products.
An individual even with a matriculation and having new simple IFMP certification can work as the distributor of mutual funds. Others, who can all act as distributors of single AMC for selling mutual funds unit include the individuals having Master’s degree or other professional qualifications, retired government or semi-government officials of grade 16 and above with a service of at least 10 years, retired bank officers of OG II or above with a service of at least 10 years, individuals already acting as distributors of mutual funds for the last 3 years and insurance agents with a valid registration certificate and verification of credentials from such insurance company.
To build the capacity of distributors and to increase the knowledge base, it has also been made mandatory for the AMCs to arrange an in-house training for its employees and distributors twice a year.
The Mutual Funds Association of Pakistan shall be responsible for maintaining the centralised database of such distributors and disseminate it on its website for the information of investors.
The SECP expects these reforms would play a critical role in the long-term sustainable growth of mutual funds industry as the `presence of an independent and wide distribution network would provide access to large investor base, particularly retail investors.