Pursuing its agenda of developing competitive capital markets, the Securities and Exchange Commission of Pakistan (SECP) has specified the eligibility criteria and enabling framework to register as a trustee of open-end or close-end schemes.
Under the framework, notified through Circular No. 4 of 2022, a public limited company having a principal business of providing trustee services to Collective Investment Schemes (CIS), Pension Funds, Real Estate Investment Trust (REIT) Schemes, and Private Funds, is eligible for registration. The minimum equity requirement for eligibility is set at Rs. 100 million or 0.10 percent of the net assets under its trusteeship, whichever is higher.
The trustee registration will strengthen the fund management sector, bring more transparency, increase digitalization and promote a healthy corporate culture.
One of the main requirements of eligibility for registration as a trustee is to have at least one financial institution or an insurer with net equity of at least Rs. 1 billion, as a major shareholder. It is further specified that the directors, chief executive, and major shareholders shall comply with Fit and Proper Criteria and shall be subject to prior approval of the SECP. Listed Companies Code of Corporate Governance will also apply to the trustee company.
