SECP to Unveil Centralized Digital Fund Distribution Platform for Asset Management Companies

The Securities and Exchange Commission of Pakistan (SECP) has decided to introduce a centralized digital mutual fund distribution platform acting as an intermediary between the Asset Management Companies and the investors.

The SECP has issued details of the new future concepts and projects under consideration of the commission.

Through such a platform, the AMCs had access to individual customers in remote areas and cater needs of small savers. Methodology An online dashboard enables customers to onboard through an online sign-up using their email account (Gmail/Yahoo/Outlook) and complete the process.

Subsequent to KYC and linking of Banking a risk profile of the customer is created based upon risk appetite-related details provided to the platform. Customers can browse a list of investment opportunities (Conventional/ Islamic), read about their summaries and market profiles, and make their investment decision.

The Application Commissioner receives the request and confirms the status of investment once the background process has been completed. Redemption requests can be made online through the dashboard. YPay will forward their request to the concerned AMC, and upon successful redemption, the funds will be transferred to the customer’s linked bank account and they will be duly notified via Email notification, SECP added.

The SECP has also introduced the concept of the Pakistan National Investor Portal (PNIP) to provide opportunities to the potential companies intended to raise funds through crowdfunding. The Portal will identify the risks involved in equity crowdfunding so that a regulatory framework addressing the concerning risks can be introduced and also identify the optimal approach for regulating equity crowdfunding.

The PNIP called applications from potential companies that wanted to raise funds through crowdfunding. Companies were further shortlisted based on the due diligence criteria of PNIP. After shortlisting, companies went through an investment readiness program, where they were prepared for pitching the issue to eligible investors. Subsequent to the investment readiness program, the platform was opened for the registration of eligible investors.

The platform could then match potential investors with companies seeking funds. All subscriptions were to be made through banking channels and parked in an escrow account. Performance PNIP identified/shortlisted potential companies for crowdfunding, however, said companies could not be showcased before the investors due to time constraints, the difficulty faced in the marketing of the crowdfunding platform, and identification/registration of eligible investors, SECP added.