Home »Stocks and Bonds » Pakistan » Mutual funds management condition eased

  • News Desk
  • Nov 3rd, 2005
  • Comments Off on Mutual funds management condition eased
The Securities & Exchange Commission of Pakistan (SECP) has waived the condition of foreign collaboration for the management of open-end mutual funds. "Foreign collaboration will no longer be a condition for the management of open-end mutual funds," SECP announced in a statement on Wednesday.

Under the Assessment Management Companies Rules 1995, SECP said, the management of companies were required to collaborate with foreign fund managers of good repute to become eligible for managing equity and balanced open-ended funds.

This condition was to facilitate the transfer of technical knowledge and expertise from overseas fund management companies to the local industry. Most market participants now feel that this condition has outlived its usefulness.

The statement said that withdrawal of this condition should remove any unnecessary barrier for professional individuals or entities wishing to enter this industry and would save the cost.

It is hoped that business community will take advantage of this market development initiative by SECP and is expected that all fund management companies will upgrade their technical skills, modernise their procedures, enhance their training budgets and adhere to the highest standards of corporate governance.

Also to prevent market abuse, the SECP will be strengthening its approval criteria and enforcement systems.

Over the past few years, the mutual fund industry has witnessed substantial growth as its size has proliferated from around 24 billion rupees to more than 100 billion rupees.

The SECP noted that asset management companies have demonstrated the ability to improve the quality of their local staffing through improved hiring and training.

"The removal of foreign collaboration condition will help expand the industry and might cut cost of the fund," one analyst noted.

Copyright Business Recorder, 2005


the author

Top
Close
Close