SECP introduces KFS requirements for asset management companies

March 28, 2025 (MLN): The Securities and Exchange Commission of Pakistan (SECP) has introduced new requirements for Asset Management Companies (AMCs) to issue Key Fact Statements (KFS) to enhance transparency and investor awareness, enabling informed decision-making.

The KFS is designed to provide investors with clear and concise information, empowering them to make well-informed investment choices, according to the press release issued today.

Under the new requirements, AMCs must ensure that each Collective Investment Scheme (CIS) and Investment Plan has a separate KFS, which must be readily accessible on the AMC's website, digital platforms, and the websites of digital distributors.

 The KFS includes details on the investment objective, authorized investment avenues, minimum investment amount, fund duration, and performance benchmarks.

It also covers subscription and redemption terms, applicable charges, and a reference to the total expense ratio (TER) in the fund manager report.

Additionally, the KFS will outline the details of key stakeholders, including the Asset Management Company, Trustee, and Shariah Advisor (if applicable), along with their contact information.

This structured disclosure will help investors better understand fund attributes, associated risks, and expected returns, thereby promoting transparency and informed decision-making.

These requirements will take effect from April 30, 2025, for new CIS/Investment plans that have not yet been launched.

Existing perpetual CIS/Investment Plans must comply by June 30, 2025. AMCs are also required to submit supplemental constitutive documents to the SECP within one week of any amendments.

The SECP remains committed to strengthening investor protection and fostering transparency in the mutual fund industry through these enhanced disclosure measures.

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