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 are based on provisions added through the amendments to the Non-Banking Finance Companies and Reported Entities Regulations 2008 (NBFC Regulations), according to a press release.
The framework establishes governance standards, operational procedures, and safe investment guidelines to support retail participation in the mutual fund industry. The Securities and Exchange Commission of Pakistan (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 defines the categories of collective investment schemes (CIS) eligible for asset management companies (AMCs) offering investment schemes. These include funds, fixed yield/rate, sovereign income, asset allocation plans, capital protected, and exchange-traded funds.
The operational guidelines cover the maximum number and duration of investment plans, exposure limits, investment restrictions and performance standards. To enhance transparency, the Framework sets out CIS Fund-specific disclosures and includes additional risk-related information.
It also provides guidance for subscription timelines, NAV announcements, total expense ratios, formation costs, and other fees. The framework aims to protect investors through structured protocols and clear operational procedures.