Islamabad: The Securities and Exchange Commission of Pakistan (SECP) has announced new management fee caps for Collective Investment Schemes (CIS), effective from April 1, 2025, under proposed amendments to the Non-Banking Finance Companies and Notified Entities Regulations, 2008.
According to an official notification (S.R.O.22(I)/2025), management fees will be capped annually based on the average daily net assets of CIS. The caps include up to 3.00% for Equity Schemes, 1.50% for Income/Aggressive Income and Commodity Schemes, 1.00% for Money Market Schemes, and 0.50% for Fixed Rate, Exchange Traded Funds, and Index Schemes.
For hybrid schemes, a weighted average approach will be applied based on asset allocation.
The SECP also clarified that Asset Management Companies cannot charge management fees if a Fund of Funds invests in underlying schemes managed by the same company. While government levies on management fees will be excluded for compliance with regulatory caps, all costs, including taxes, must be disclosed to unit holders as part of the Total Expense Ratio.
For pension funds, the SECP has set separate fee caps: up to 2.00% for Equity Sub-Funds, 1.00% for Money Market Funds, 1.25% for Income Funds, and 1.50% for Commodity Funds. In the case of employer pension funds, management fees or total expense ratios will be determined by agreements between employers and pension fund managers and disclosed in the offering documents.
