KARACHI: The Securities and Exchange Commission of Pakistan (SECP) has withdrawn the condition on Mutual Funds of keeping 5 per cent cash with immediate effect.
Earlier, all the Mutual Funds companies in Pakistan were bond to have 5 per cent liquidity in their hands to deal with cash problems.
“The KSE-100 Index gained 500 points on Thursday after the decision announced by the SECP on Wednesday afternoon,” the analyst said. “The Mutual Fund Industry is investing their 5 per cent remaining amount in the stock market which will benefit local investors of Funds,” he added.
According to the SECP notification, “SECP in exercise of power conferred under Section 282D of the companies ordinance, 1984, hereby withdraws the requirements of maintenance of 5 per cent cash and near cash instruments in equity funds and fund of funds (FOF) as earlier prescribed through direction no 2 of 2017, and subsequently amended through direction no 7 of 2017, with immediate effect.”
The industry sources claimed the benefit of withdrawing the condition of 5 per cent cash will directly benefit the investors of mutual funds industry as the companies can now use the entire amount for the investment and earn a profit on it.
