ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has updated the regulatory framework for the mutual fund industry by introducing specific requirements for “Investment Plans.”
These updates build on provisions added through amendments to the Non-Banking Finance Companies and Notified Entities Regulations, 2008 (NBFC Regulations), according to a press release.
The framework sets governance standards, operational procedures, and secure investment guidelines to support retail participation in the mutual fund industry. The SECP developed the requirements in consultation with stakeholders, including the Mutual Funds Association of Pakistan (MUFAP), to align with industry practices and compliance principles.
The new framework identifies eligible Collective Investment Schemes (CIS) categories for Asset Management Companies (AMCs) offering investment plans. These include fund of funds, fixed rate/return, sovereign income, asset allocation schemes, capital protected, and exchange-traded funds.
Operational guidelines cover the maximum number of investment plans, their duration, exposure limits, investment restrictions, and performance benchmarks. To enhance transparency, the framework specifies disclosures for fund of fund CIS and includes additional risk-related information.
It also provides guidelines for subscription timelines, NAV announcements, Total Expense Ratio, formation costs, and other charges. The framework aims to safeguard investors through structured protocols and clear operational procedures.
