The Securities and Exchange Commission of Pakistan (SECP) held a stakeholder consultation with the Mutual Funds Association of Pakistan (MUFAP), asset management companies and pension fund managers on proposed amendments to the Non-Banking Finance Companies and Notified Entities Regulations, 2008 aimed at rationalising costs for retail investors. Participants agreed to replace the total expense ratio (TER) capping regime with a management fee capping approach, disallow reimbursement of indirect expenses from mutual funds, and require adequate disclosure of total expenses charged, with the changes set to take effect from 1 July 2025. The proposed amendments also place greater emphasis on Shariah compliance for mutual and pension funds by mandating alignment with Shariah Governance Regulations. Beyond the expense reforms, the session discussed establishing a Market Development Fund to pool resources for investor education, and agreed to develop a digital strategy and growth roadmap for the mutual fund industry, including leveraging fintech, payment solutions and distribution models and further streamlining onboarding by reducing documentation. SECP noted that it had previously sought public feedback via a consultation paper, and that draft amendments were formally notified on 15 January 2025 to support further industry consultation ahead of the 1 July 2025 implementation.

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