The Securities and Exchange Commission of Pakistan (SECP) has introduced standardised performance benchmarks for Asset Management Companies (AMCs) managing Collective Investment Schemes (CIS). The new framework aims to bring transparency, consistency, and comparability to performance disclosures across the asset management industry.
The SECP has categorised these benchmarks for both Conventional and Shariah-compliant schemes. The Mutual Funds Association of Pakistan (MUFAP) will calculate and disseminate these benchmarks and peer group average returns for various categories on a monthly basis, enabling investors to make informed decisions aligned with specific investment strategies.
Under the new directives, AMCs must adopt these benchmarks within one month and update offering documents and Fund Manager Reports (FMRs). AMCs must include both old and new benchmarks in their reports for a three-month transition period before exclusively adopting the prescribed standards.
MUFAP will monitor compliance and publish the benchmarks for all categories monthly using weighted average rates. Additionally, MUFAP will share one-month, three-month, six-month, nine-month, and one-year PKISRV rates daily, either directly or through interpolation based on prescribed methods.
To calculate benchmark returns for Conventional and Shariah-compliant Fund of Funds CIS, investments in cash or near-cash instruments will be considered as placements in Money Market CIS. MUFAP will also use the highest available savings account rates in each category to ensure accurate benchmarks.
MUFAP will publish a monthly ranking of CIS based on their returns over the last 365 days on its website. The SECP stated that all AMCs must amend offering documents and FMRs within one month of this directive, ensuring adherence to the new standards aimed at aligning the local mutual fund industry with global best practices.
