SECP eases mutual fund rules

ISLAMABAD: DAILY QUDRAT :The Securities and Exchange Commission of Pakistan (SECP) has taken several measures to revamp the regulatory framework governing mutual funds to ensure ease of doing business, the regulator said in a press release on Tuesday.

The SECP said the measures have been taken after consultations with the Mutual Fund Association of Pakistan which includes replacing seed capital requirements of Rs200 million with minimum fund size of Rs100m to offer flexibility in launching new funds.

The SECP also allowed to-charge selling and marketing expense to fund, charging of back office accounting expenses and granting permission for charging sales load on direct investment and online investment.

“In order to promote ease of doing business, the commission on June 20 approved further amendments in the Non Banking Financial Company Regulations 2008 and provided an operational flexibility to Asset Management Companies (AMCs),” the SECP said.

The regulator also introduced other incentives including enhancing the expense ratio cap for equity funds from 4 to 4.5 per cent of the net assets, removing all sub caps particularly regulatory caps imposed earlier on the management fee, excluding all government levies/charges from the expense ratio.

To facilitate mutual funds outreach, AMCs have been allowed to charge selling and marketing expenses including alternative delivery channels expenses to all categories of funds without any time and sub-limit.

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