The Securities and Exchange Commission of Pakistan (SECP) has approved simplified regulatory requirements for distributors of mutual funds to increase the outreach and improve the penetration of retail investors.
SECP Chairman Zafar-ul-Haq Hijazi has said that in order to make the country’s economy grow, it is imperative to encourage mobilisation of savings and investments through the capital markets. The mutual fund industry has expected to play its due role in promoting a culture of savings and investment.
According to the new framework, distributors selling mutual fund units of a single asset management company (AMC) would not be required to obtain license from the SECP or register with the Mutual Funds Association of Pakistan (MUFAP). A new cadre of retired government and semi-government officials, retired bank officers and insurance agents would be eligible to act as distributors of mutual funds.
The SECP expected that the proposed measures would be helpful in encouraging qualified individuals to act as distributors to promote mutual funds as a preferred choice of investment.
They can play a critical role in long term growth of mutual funds industry and development of capital market which is linked with the participation of investors, in particular with retail investors in the mutual funds industry. Moreover, it has the potential to create many jobs for fresh graduates as well as for experienced professionals.
The SECP has made necessary amendments to the Non-Banking Finance Companies and Notified Entities Regulations, 2008, which are available for public comments on its website.
