On May 21, 2025, PAK SEC issued amendments to requirements for investment plans offered under collective investment schemes (CIS), updating the earlier circular above.
Existing CIS other than those specified with shell structure prior to issuance of circular may continue to have only one perpetual investment plan within respective CIS.
Where CIS has more than one perpetual investment plan, remaining perpetual plans must either be converted into fixed maturity plans or merged with similar category of CIS/plan with maturity date/completion of merger not later than Dec. 31, 2026.
For perpetual plans under active independently launched CIS, all such perpetual plans must be converted into fixed maturity plans or merged with similar category of CIS/plan with maturity date/completion of merger not later than Dec. 31, 2026.
Conversions from perpetual to fixed maturity plans or mergers with similar category of CIS/plan require prior approval of PAK SEC within 180 days from date of issuance of the circular or the relevant plan shall subsequently be revoked accordingly.
Management fee caps (M-fee caps) for respective investment plans, as amended under regulations for each category of CIS, shall be applicable with effect from Jul. 1, 2025.
Application proportionate to net assets of each investment plan under the CIS; in addition, earlier total expense ratio caps for CIS remain applicable until Jun. 30, 2025.
Document dated May 21, 2025, received from PAK SEC Jun. 12, summarized Jun. 16.
On Jan. 6, PAK SEC introduced regulatory framework re mutual funds.
PAK SEC strengthened regulatory framework for mutual fund industry by specifying detailed requirements for investment plans; also issued circular dated Dec. 23, 2024 on Requirements for investment plans offered under collective investment schemes.
Framework aims to enhance governance, streamline operations, and ensure secure investment horizons, thus fostering retail penetration in the mutual fund industry.
Requirements specify the eligible categories of collective investment schemes (CIS) under which asset management companies (AMCs) can offer investment plans.
Operational requirements provide clear guidelines on maximum number of investment plans, duration, exposure limits, investment restrictions, performance benchmarks.
Mandates specific disclosures for fund of fund CIS and additional risk information.
Obligates AMCs to issue separate investment plan report within fund manager report.
Outlines essential offering guidelines, including subscription timelines and NAV announcements; establishes provisions for total expense ratio, formation costs.
Effectiveness
CIS shall ensure compliance within 180 days of issuance of circular, i.e. Jun. 21, 2025.
May 2025 Additional Amendments
On May 21, 2025, PAK SEC issued amendments to requirements for investment plans offered under collective investment schemes (CIS), updating the earlier circular above.
Existing CIS other than those specified with shell structure prior to issuance of circular may continue to have only one perpetual investment plan within respective CIS.
Where CIS has more than one perpetual investment plan, remaining perpetual plans must either be converted into fixed maturity plans or merged with similar category of CIS/plan with maturity date/completion of merger not later than Dec. 31, 2026.
For perpetual plans under active independently launched CIS, all such perpetual plans must be converted into fixed maturity plans or merged with similar category of CIS/plan with maturity date/completion of merger not later than Dec. 31, 2026.
Conversions from perpetual to fixed maturity plans or mergers with similar category of CIS/plan require prior approval of PAK SEC within 180 days from date of issuance of the circular or the relevant plan shall subsequently be revoked accordingly.
Management fee caps (M-fee caps) for respective investment plans, as amended under regulations for each category of CIS, shall be applicable with effect from Jul. 1, 2025.
Application proportionate to net assets of each investment plan under the CIS; in addition, earlier total expense ratio caps for CIS remain applicable until Jun. 30, 2025.
Document dated May 21, 2025, received from PAK SEC Jun. 12, summarized Jun. 16.
