The Securities and Exchange Commission of Pakistan (SECP) has introduced stricter disclosure requirements for Fund Manager Reports (FMRs) issued by Asset Management Companies (AMCs). The move is aimed at increasing transparency and enabling investors in Collective Investment Schemes (CIS) to make better financial decisions.
Under the new rules, AMCs must now disclose key financial metrics such as actual expenses as a percentage of net assets, applicable sales charges, monthly portfolio turnover ratios, risk-adjusted returns, and other performance indicators like yield to maturity, beta, and standard deviation. Additionally, FMRs must provide a comparative analysis of benchmark and committed returns to offer clearer insights into fund performance.
For Exchange-Traded Funds (ETFs), SECP has mandated the disclosure of index descriptions and tracking difference history to help investors understand how well these funds follow their benchmarks.
To maintain consistency and accuracy in these disclosures, the Mutual Funds Association of Pakistan (MUFAP) has been assigned the task of developing a standardised methodology for calculating these financial measures. The new requirements will take effect as soon as SECP approves MUFAP’s proposed methodology.
This initiative is part of SECP’s ongoing efforts to strengthen investor protection, improve market integrity, and enhance transparency in Pakistan’s asset management industry.