SECP Issues Master Circular for Asset Management Companies and Investment Advisors

In order to facilitate the asset management industry and to ensure compliance with statutory/regulatory requirements in an efficient manner, the Securities and Exchange Commission of Pakistan (SECP) has issued an updated Master Circular for Asset Management Companies (AMCs) and Investment Advisors (IAs).

The Master Circular is a compilation of all applicable circulars, directions and clarifications issued by the SECP from time to time for the regulation of collective investment schemes (CIS) /mutual funds/ investment advisory services (IASs).

The Master circular covers matters related to digitization, advertisements, categorization of CIS and investment avenues, disclosure requirements, Constant Proportion Portfolio Insurance (CPPI) based schemes, exchange-traded funds (ETFs), performance benchmarks for CIS, and selling and marketing of CIS.

It also covers sales load and expenses, valuation and provisioning, mandatory certifications for professionals of NBFCs and distribution of Units of CIS, outsourcing arrangements, risk management and compliance, merger of open-end schemes, the procedure for unit holders meeting, separately managed accounts and closed-end schemes.

In case of any inconsistency between the master circular and the applicable circular, the contents of the relevant circular shall prevail. The said Master Circular is available on SECP’s website.

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