The State Bank of Pakistan (SBP) and Securities and Exchange Commission of Pakistan (SECP) are jointly working to launch digital accounts for resident Pakistanis that will be similar to the Roshan Digital Accounts (RDA) for overseas Pakistani to enable citizens to invest in various investment avenues through a hassle-free process.
Official sources told Propakistani that the customers of banks and financial institutions will be able to open accounts in the Pakistan Stock Exchange and mutual funds easily, using the information submitted to their banks.
SECP Allows AMCs to Invest in Unlisted or Private Real Estate Investment Schemes
The RDAs are a massively proven success of the SECP and the State Bank of Pakistan (SBP) as overseas Pakistan could access the stock exchange and mutual funds through these accounts.
There will be no additional requirement for documentation for investors to submit to brokerage houses and asset management companies. The facility is likely to be announced in the next few weeks. They will be given access to investment avenues through the KYC (Know Your Customers) details that have already been submitted to the banks and branchless banking operators.
The main objective of this move is to enhance the participation of the masses at various investment institutions to widen the investors’ base at the regulated markets in Pakistan while ultimately attracting investments in these institutions.
The RDAs were introduced last year in Pakistan specifically for overseas Pakistanis. In collaboration with the SECP, overseas Pakistanis were given the option of investing in the stock exchange and various bonds, which resulted in inflows of investments in the provided instruments.
The mechanism of digital onboarding was introduced by the SECP and received an overwhelming response as the public interest in investing in instruments of asset management companies has increased.
According to an official, more than 8,000 accounts were opened online until 2020. In the five months of 2021, the number of accounts opened online was 21,000 in March.
The mechanism offers investors a seamless account opening process for investments in mutual funds, and eliminates the requirement of physical presence and the submission of physical documents.
The assets management companies are allowed to conduct an online customer verification process for the opening of online accounts and to ensure investors’ protection and compliance with all the applicable relevant legal and regulatory frameworks.
SECP Specifies Regulatory Framework for Debt and Hybrid ETFs
Furthermore, the mechanism introduces digital verification for the authentication of the investor and original identification documents through virtual meeting applications (like WhatsApp and Skype) for online face-to-face interaction in real-time.
Also, a simpler account opening process eliminates the physical signing of different forms and declarations by investors.