SECP Tightens Rules, MUFAP Membership Now Mandatory

March 31, 2026 (MLN): The Securities and Exchange Commission of Pakistan (SECP) has made it mandatory for all investment advisors and distributors of mutual and pension funds to obtain membership of the Mutual Funds Association of Pakistan (MUFAP).

The move is aimed at enhancing investor protection and ensuring greater transparency in Pakistan’s financial markets.

The regulator stated that the directive is designed to bring all market intermediaries under a unified Code of Conduct, ensuring standardized practices across the industry.

By enforcing a single framework, SECP aims to improve governance, reduce inconsistencies, and build stronger investor confidence in mutual and pension fund investments.

The requirement will apply to Licensed Investment Advisors, Licensed Securities Advisors, and distributors working with Asset Management Companies and Pension Fund Managers.

MUFAP will play a key role in facilitating membership and ensuring compliance, effectively bringing advisors and distributors onto a single platform to promote professionalism and streamline market practices.

According to the press release of SECP, the initiative will also enhance transparency and provide investors with a formal system for handling complaints and resolving disputes.

This is expected to improve service standards while safeguarding investor interests, particularly in an environment where financial literacy and trust remain critical challenges.

The move is part of SECP’s broader strategy to strengthen oversight and align Pakistan’s financial markets with international best practices.

By improving regulatory discipline and encouraging adherence to standardized procedures, the directive is likely to support the long-term development of the mutual fund sector.

Mandatory MUFAP membership could significantly enhance the credibility of Pakistan’s asset management industry, making it more attractive for both local and international investors.

The step reflects SECP’s continued efforts to create a more transparent, efficient, and reliable investment ecosystem in the country.

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