SECP Strengthens Investor Confidence with New Fund Manager Disclosure Standards

The Securities and Exchange Commission of Pakistan (SECP) has issued a circular introducing enhanced disclosure requirements for Fund Manager Reports (FMRs) by Asset Management Companies (AMCs).

These initiatives enhance transparency, empowering investors and unitholders of Collective Investment Schemes (CIS) with the insights needed for better-informed decision-making.

Key enhancements include disclosure of Actual Expenses as a percentage of net assets, applicable sales loads, monthly Portfolio Turnover Ratios, risk adjusted return, Yield to Maturity, Modified Duration, Macaulay Duration, Beta and Standard Deviation.

Further, FMR must also disclose comparative analysis of benchmark and committed returns. In addition, index descriptions and tracking difference history for ETF are also mandated.

To ensure consistency and accuracy in disclosures, the Mutual Funds Association of Pakistan (MUFAP) has been tasked with developing a standardized methodology for calculating the prescribed quantitative measures.

The enhanced disclosures will become effective immediately upon SECP’s approval of the MUFAP methodology.

This initiative reflects SECP’s continued commitment to improving market integrity, transparency, and investor protection in the asset management industry.