ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has introduced a new category of mutual funds—“Infrastructure Schemes”—under the open-end collective investment schemes framework. This step aims to enhance the role of capital markets in financing long-term infrastructure projects, a critical need for Pakistan’s economic growth.
The idea for this initiative was first proposed at the Mutual Fund Focus Group Session 2025, where it was identified as a key milestone in the Fund Management Department’s Roadmap 2025-26. Extensive consultations were conducted with the Mutual Funds Association of Pakistan (MUFAP) and other industry stakeholders to refine the regulatory framework. The final structure incorporates feedback from these discussions, ensuring regulatory clarity and investor protection while aligning with national development goals.
Pakistan faces significant challenges in expanding and modernizing its infrastructure, with estimated financing needs of around USD 15 billion annually. Currently, infrastructure spending in Pakistan is below international standards, accounting for just 2.1% of GDP compared to the global norm of 8-10%. Through this new framework, the SECP aims to give infrastructure-focused mutual funds greater visibility and offer investors a transparent and structured way to participate in projects of national importance.
The new category allows Asset Management Companies (AMCs) to classify infrastructure schemes as equity, debt, or hybrid funds, depending on the investment strategy. Eligible sectors include energy, transport, logistics, water, sanitation, communication, and social and commercial infrastructure like hospitals, educational institutions, industrial parks, affordable housing, and tourism facilities. This expanded scope is designed to attract both retail and institutional investors to projects that directly contribute to Pakistan’s development.
The framework sets a minimum fund size of Rs. 100 million for perpetual schemes and at the close of the subscription period for closed-end schemes. AMCs will also be required to invest a minimum of Rs. 25 million in seed capital for closed-end schemes with a maturity of over three years, aligning the interests of managers and investors. Closed-end schemes can offer periodic subscription and redemption windows after one year, subject to clear terms in the offering documents.
Regarding transparency, the framework mandates that Net Asset Value (NAV) disclosure for closed-end infrastructure schemes occur at least once a month. Additionally, schemes must maintain at least 70% of their net assets in infrastructure securities, with any shortfall needing to be addressed within three months.
The SECP has also introduced a transparent fee structure, with management fees capped at 3% per annum for equity schemes, 1.5% for debt schemes, and a weighted average for hybrid schemes. No sales load will be charged, although contingent load may apply for early redemption in closed-end schemes.
This initiative marks a significant move by the SECP to bridge Pakistan’s infrastructure financing gap by mobilizing long-term domestic savings, while providing strong safeguards for investors. The introduction of this category reinforces the SECP’s commitment to fostering sustainable economic growth and deepening the capital markets to support Pakistan’s development.
The circular outlining the framework is available on the SECP’s website.
