SECP Revises Mutual Fund Regulations

The Securities and Exchange Commission of Pakistan (SECP) has released a revised Master Circular for Asset Management Companies (AMCs) and Investment Advisers (IAs), creating a unified regulatory framework that consolidates all key compliance requirements governing Pakistan's mutual fund industry into one comprehensive reference.

The newly updated circular combines every directive, clarification and regulatory instruction issued by the Commission through June 30, 2026, covering updates introduced since January 6, 2009. It serves as the primary regulatory guide for Collective Investment Schemes (CIS), Mutual Funds and Investment Advisory Services.

The latest version now incorporates regulatory provisions covering Infrastructure Funds, ESG Funds, Digital Asset Management Companies, and Investment Plans, reflecting the industry's evolving investment landscape.

It also includes updated rules for digital investor onboarding through regulated financial institutions, increased investment thresholds for low-risk investors, performance benchmark standards, Key Fact Statement (KFS) obligations, standardized trust deed templates and the Market Development Fund framework.

Additionally, the Master Circular outlines regulations related to digital transformation, advertising practices, classification of Collective Investment Schemes, eligible investment avenues and disclosure obligations. It further establishes guidelines for Constant Proportion Portfolio Insurance (CPPI)-based schemes, Exchange Traded Funds (ETFs), performance measurement standards, and the marketing and distribution of Collective Investment Schemes.

The document also details requirements regarding sales charges and operational expenses, asset valuation and provisioning, mandatory professional certifications for Non-Banking Finance Company (NBFC) personnel, CIS unit distribution, outsourcing arrangements, risk management and regulatory compliance. It further defines procedures governing mergers of open-end schemes, unit holders' meetings, separately managed accounts and closed-end schemes.

The SECP further clarified that in the event of any conflict between the Master Circular and an individual applicable circular, the provisions of the specific circular will prevail.